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-- - Number 57 X 3';e.iImage for the World Bank at this Y 2nr.5 ,-?r,nnal hIeetings The 1995 Annual Meetings of the World Bank and Inteinational M...
Author: James Wade
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Number 57

X 3';e.iImage for the World Bank at this

Y 2nr.5 ,-?r,nnal hIeetings The 1995 Annual Meetings of the World Bank and Inteinational Monetary Fund provided an opportunity for the World Bank President to use his skills as a p a t communicator in an international forum. And from the shortage of antiBank articles and, on the whole. positive covera s s of the meetings in the media. he appears to ha\.e succeeded very well indeed. LIi-. Wolknsohn, who is zoncerned about the image of the World Bank a:, a faceless bureauci-ac) anci an institution without a soul, stresses that. it1 reality, the World B,mk is a caring insti. --

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tution w'?ich i i deeply committed to raiiing the living strindarcis of thz poor. While mo\t B'~iik staff see themi e l ~ eabcaring i andconlmittzd. it 1s very difficult to show the human face of an institution with o\er 10.000 staff which i h lending billions of dollars evei-4; year. $11.. Wolfensohn appeal-s undaunted by the t21hli. He brings from his initial visits to about 25 de\.eloping countries a series of vivid portraits of indi\,iduals struggling to improve their lives and that of :heir children against almost overwhelming odds. In so doing, he brings out the human condition of those who benefit froin World Bank programs. While making a strong case for continued support for IDA, he rarely misses an opponunity

to hammer home the fact that the bulk of World Bank activities are financed by borrowing in the world's financial markets and not by tax-payers money. Mr. Wolfensohn's campaign is supported by an extremely pro-active External Affairs Department. Amongst its many activities this year was a special program of seminars to educate government and private sector representatives about the Bank and to encourage interaction among government delegations, private sector representatives and senior World Bank officials. Seminars were presented on a number of individual countries: Bangladesh, Kazakhstan, Moldova, Morocco, Peru and the Philippines. A seventh seminar focused on Southern Africa, particularly the market potential of South Africa's neighbors in a region in transition. Special topic seminars dealt with such questions as: What financial infrastructure is needed to "grow" local debt markets? How can the Bank's new guarantee instrument be used to mobilize private capital'! How can

In this Issue Around the Bank. ................ 1 Society Events 3 In Memoriam.. ................. 14 Chapter News .................. 18 News in Brief. ..................20 New Members .................. 20 Retiree Letters. 20 Special Features 23 Coming Events ................. 27 Bulletin Board 28

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Due to an unforeseen delay in the production stdges of the October/November issue of the Newsletter over which the editors had no control, the dates of a number of events announced in the Bulletin Board and Coming Events have already passed. We sincerely regrer the tlclay and any inconvenience it may have caused.

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financing be made available to micro-enterprises and small business, particularly those run by women'? How can the education systems meet the challenges of a changing work force? Why haven't more countries privatized their stateowned enterprises? The seminars were very positively received and are likely to be an important element of future Annual Meetings. The Boiler Room Talking of efforts to get the Bank's message out to the press and to decision makers, this year's World Bank's press releases are much livelier than they used to be. For one thing, computer technology has made it easier to include charts and eye-catching graphics. More important, however, they are more informative and comprehensive. Among the press releases for June, for example, one dealing with a major Bank study, The Emerging Asian Bond Market, was six pages long and included a discussion of the role of bond markets in development and a brief description of the various East Asian markets. as well as an explanation of the World Bank's role in supporting the develop~nentof these markets. Press releases i'o\.ering the 1995 World Development Report PI-ovided an excellent sum~naryof the report's main messages and interesting quotes from staff involved in its preparation. Even a fairly routine release announcing the World Bank's operational results for FY95 included an attention-getting insert explaining the differences between IDA and IBRD and the proportion of lending resources allocated to each. All this is part of a new effort (which Mark Malloch Brown, Director of External Affairs, talked about at The 18 18 Society's Spring Luncheon - see the JulyIAugust 1995 Newsletter) to educate the public, and particularly decisionmakers, about the World Bank. The policy now is to be active rather than reactive vis-e-vis the media. Instead of simply responding tocriticism, the Bank now works to bring accurate information about its role, its policies and. of course, its successes to the media.

Press releases are prepared in the News BUreau, or the Boiler Room, as it is called by its staff of five who are all young, energetic and committed. They seem to thrive on long hours and high pressure. Walking into the Boiler Room is an invigorating experience. Well before the build-up to the Annual Meetings, the News Bureau had already produced more than 500 press releases from the date of its inception in February of thls year. Using state-of-the-art technology, they are able to target the press releases to specific audiences. For example, an announcement of an environmental project might be targeted to editors who deal primarily with that topic; while other material might be targeted to specific States or to type of publication, such as financial journals. Once the target list has been set, a fax-server, which can transmit the material over multiple telephone lines simultaneously, speeds up the process of getting the information to the selected editors. The Boiler Room staff not only disseminate Bank news to the press, they also keep Bank management informed of media coverage of the World Bank. For this purpose, they use an outside firm, CARMA International. to track US media coverage. CARMA provides regular information on volume of coverage, favorability rating (60 out of 100 or moderately favorable for the World Bank in June), and an indication of the source and reasons for both favorable and unfavorable coverage. At the moment, this service is limited to the US, but the potential exists for international coverage. Wire service stories are picked up as soon as they are put out, also through the computer. In this case, the program used includes an automated clipping service which filters the incoming stories for those of interest to the Bank. These automated clips are shared with the Regions.

No Go for Nepal Hydro Project The JanuaryIFebruary 1995 issue of the Newsletter reported on the recommendations of the Bank's Inspection Panel with regard to the proposed Arun I11 hydropower project in Nepal. At that time, the Panel stated that there had been "appar-

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ent violations of policy" which needed to be addressed before proceeding with the project. On August 3, however, the Bank announced that it would not proceed with plans to support the S175 million project. Instead, the Bank would work with the Government of Nepal to help devise and implement an alternative strategy for meeting the country's need for electric power. Mr. Wolfensohn acknowledged that enerzy was crucial to Nepal's prosperity, but concluded that the risks to Nepal of proceeding with the present project were too great. The three main considerations behind the decision were: i) the limited capacity of institutions in Nepal to implement a project of this size and complexity at this time; ii) the need for a number of measures which did not have widespreadpopular support (such as adjusting tariffs) to ensure that the project did not crowd out priority social expenditures: and i i i ) the lack of adequate cofinancing. further complicated by the delay ~vhichhad increased estimated project costs by $30 to $40 million. A tea111of senior Bank staff is expected to visit Nepal to discuss ways to improve the government's capacity to address social and en\.ironmental impacts of likely hydropower projects and to create a more pro-active community development program in the Asun Valley. --

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Seventeenth Annual &leering of the 18l S Society [These minutes oftheproceedinys qf the 17th Arznll~11 Meeting c,frlze Society on F r i d u ~October . 4, 1995. will be presented to the ne.rt A nnuctl Meeritlg for approval. Comments or correctiotls ma? be sent to the Socieh's Office.]

The Chairman welcomed participants to the Annual Meeting of the Society. This year there were no apologies needed for the accommodations,

since the Society was able, at long last, to make use of the new Board Room. The Chairman said that the accommodations were a vast improvement over last year when participants were all huddled together in a tiny downstairs room. However, while comfortable, she found the new Board Room more than a little intimidating [see photograph. page 161. Guests.

A number of guests representing other retiree organizations were introduced: Alan Wright, EMF; Norman Jones, IDB; Abbas Ordoobadi, AFICS: Ernesto Moreno, OAS; and M . Ikramullah Khan all the way from the Philippines, representing the Asian Development Bank. There were also many out-of town-members of the Society attending this year: Burke Knapp from California; Beryl Wildenburg fromFlorida; Martin Koelle from Germany; Hans Pollan from Austria; Tudor Kulatilaka, Norma Campbell and Morris Miller from Canada; Neil Paterson from Australia; Jacques Crosnier. Jean Baneth, and Gunter Kreuter from France; Quill Hermans from Botswana: and Robert Bronkhorst from the Netherlands.

The Chairman rerninded participants that the Society does not send out copies of the Minutes. Instead draft minutes of the previous year's meeting are published in the Newsletter issued following that meeting, for consideration at the next meeting. Last yeas's ~ueetingwas reported on extensively in Newsletter No. 53. A motion to approve the minutes of the 16th meeting was made. seconded and carried. Chairman's Rem~zrks.

The Chairman spoke first about the Society's membership which had grown to about 1900, an increase of about 120 over last year, representing about 5770 of all retirees. About 750 members are local and the rest are scattered all over the United States, Europe and, indeed, all over the world.

The Society continues to emphasize, and most retirees now know that membership in the Society is not automatic. Retirees interested in joining must fill out the application form and pay the munificent sum of $10 for a life-time membership. .\!-en, Officers.

Under the by-laws, the officers are appointed by the Board. This year, the Treasurer, Connie Fernandini, resigned, and a new Treasurer, Colin Davis, has been appointed to replace her. Colin spent most of his working life in the Bank in the Controllers' Department so, as the Chairman noted, his selection could be considered typecasting. The Assistant Treasurer, Bill Bennett, also decided that after 15 years as either Treasurer and Assistant Treasurer, it was time to step down. In his place, Vince Riley has been appointed. Vince was in the International Relations Department of the Bank for much of his working life in the Bank and then retired after service as Ombudsman. Susan Frampton. who was Assistant Secretary. has also retired. Susan leaves a gap that will be very difficult to fill because. regardless of the official definition of the function of Assistant Secretary, Susan was a marvel on the Program Cori~mittee. She could always pull people together to take care of the logistics, a very badly needed talent. The Chairman made a special plea for anyone prepared to help out on the Program Committee to let the Society Office know. While the Society is seeking someone to replace Susan Frampton as Assistant Secretary; in fact, what was really needed was a number of people to work on the Program Committee. The Chairman pointed out that there was some tendency on the part of the membership to let other people do the work while enjoying the benefits of their efforts. In her view, one of the things that really needed to change about the Society was to broaden the base - the numbers of persons who pitch in and do some of the work.

Committees. The Insurance and Pension Committees were rather quiet this year. The Chairman hoped that the speakers on insurance and pension would not have anything to say that would create or foreshadow turbulence in those areas for the next year. The Program Committee, as usual, was very active. For the benefit of new members who might not be aware of the ranse of the Society's activities the Chairman described this year's activities. There were two lunches in the Bank. At the first, participants listened to an address by the General Director of the Washington Opera and. at the second, by the Director of the External Affairs Department. Years ago the Society started what has become a tradition of having a trip to an estate or a plantation house decorated for Christmas in December. This ye~lr.the Oatlands Plantation Lvas chosen. Then there was a Chamber Music Concert at the French Embassy. an opera at Wolf Trap in the summertime. anda visit to the Kreeser Museum. There was a Spring Party. and. in addition to these social occasions. the brown bas lunches with Georg Gabriel on personal financial management have continued. A number of programs ha\-r already been planned for the coming year. In No1,ember. there %?illbe a tour of the National Postal Museum. one of Washington's newest museums. and a fascinating place. It will be led by a retiree and member of the Society who is a docent there. For December, there will be the traditional visit to a decorated house - this time to Hillwood, Marjorie blerriweather Post's house. The first tloor will be decorated for Christmas and there will be cookies and cider. The ~ i s i will t take place on a Saturday afternoon in December and notices will go out at an appropriate time. There will be a luncheon in the Bank, with a speaker, in January. Nothing has yet been scheduled for February, but in March. the Society is on Mr. Wolfensohn's calendar for a luncheon. The Chairman noted that although he has agreed in writing and a date had been set. the firn~ncsso f

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that date was somewhere between being written in concrete and written in water. The date will be confirmed in January. The Chairman suggested that the next administration try to give priority for participation in the Wolfensohn luncheon to those who had signed up for the luncheon with Mr. Preston. Although they had turned up for the luncheon. Mr. Preston. due to his illness, did not. There is nothing yet scheduled for April. In May. there will be a return visit to the Kreeger %luseum. The Chairman described the Kreeger hluseum as splendid and urged those who hadnot been there to sign up. The Society continues to have a SupportCommittee a\,ailable to make telephone calls and visits. run errands. and do ferrying by car for people who might need assistance. Fortunately, there has not been very much demand for the services. Gloria Scott. who is still Chairman of that Committee. and several of the members, are frotn hl~tryland. More volunteers living in the District and Virginia are needed. Some preliminar) steps have been taken touw-d setting up a Travel Committee. Chandra Hard) is in charse of this for the Society Board. A note appeared in the last issue of theNewsletter inviting people to u;rite in and indicate their interest and \{,here the>-would like to travel if a trip is orsanized. Although there were some responses. there were not as many as expected. The Board would like to hear from other members on this issue. and the notice will be repeated.

In a pre~.iousNswsletter. Eugenio Lari contributed a piece about discounts available to retirees. senior citizens. members of thc Society. This was something in which he was very interested, and he will undoubtedly be doing more proselytizing. In the meantime. he has secured a letter from the Fendi store. in Virginia offering Society members a discount on all their items including sale items. [See the Bulletin Board on page 28 for details on the Fendi offer].

Contributions wantedfor the Newsletter. The Chairman had kind words to say about the Newsletter. She said that she made it a practice to urge friends to contribute articles and letters and encouraged everyone to join her in annoying their friends for articles and letters as well. [A suggestion strongly seconded by the Editors!]

The Chapters are bubbling along. The German Chapter held its meeting in September, and the UK is having a meeting in December. There is now a nucleus of a new Chapter in Florida. Richard Clements, a prior editor of the Newsletter, has organized a reunion in Sarasota [see Chapter News]. It seems at least possible that, for the first time, there might be a Chapter in the United States.

Office space is a problem for the Society. At the moment, there is no room for people who drop in while officers are at work, yet there needs to be a place for retirees to come and make a phone call and hang their hats. About a year ago, the Chairman wrote to the powers in charge of space allocation and reminded them of the Society's needs. She said that space is something that the next administration was going to have to work very hard on.

This is a perennial issue because as soon as a Directory is finished, it's outdated. All of the April 1994 Directories have now been handed out. Mary Wolfe and Verna Via are working on the new edition and are hopeful that it will go to the print shop sometime in November. Since the cut-off date for the submission of changes for the new Directory was July 1995, there are already large numbers of persons whose addresses are not current.

The Chairman remindedeveryone that there were only two scarves left of the original batch which were being sold for $18.75. When they are sold, the scarves from the new order would go on sale at 520 each, the same price as for the ties. [Monique DeKok modeled the Society's elegant blue and gold scarf for the benefit of the participants at the meeting.]

The Chairman reminded the menlbership that the Society is represented on both Pension Committees - the Benefits Administration Committee and the Pension Finance Committee. Although neither of the Society's representatives on these Committees was present at the Annual Meeting, A1 Raizen had left a note full of praise for the Hzad of the Pension Department. He went on to sa) that although the Fund's investment performance in 1994 was poor. to a large extent, this reflected the disappointing performance of securities markets throughout the world. However, the Fund for many years has exceeded the target of a 4% real rate of return used in the actuarial calculations of required Bank contributions to tht Pension Fund. Mr. Raizen's note went on to assure the Society that the Pension Fund is actuarially sound and able to meet the commitments made to present and future retirees. On that uplifting note, the Chairman introduced Mrs. Afsaneh Mashayekhi Beschloss, the Director of the Pension Department. Mrs. Mashayekhi said that she wanted, first of all, to give the group some idea of how important the role of pension financing had become in today's world. There are, she said, two important worldwide phenomena: one is that the proportion of the population over 60 years old is growing; the other is that in about 35 years, eighty percent of the retired population will be in developing countries and about a quarter of that will be in China alone. It was important to keep in mind that. obviously, the longer people live, the more money needed to be saved for retirement.

On the other hand, the need for investment both in developed and developing countries was increasing. Recent estimates are that developing countries will need something like $1.7 trillion annually. Although most of that will come from domestic savings, not from emerging markets or investments by pensioners, the role of pension financing was nevertheless becoming very significant. In the US alone, there was $5 trillion of pension money. Worldwide, the estimates were something like $13 trillion. This represented money that is going into savings accounts, whether through defined benefits, defined contributions, 40 1 Ks in the United States, through government funds incountries like the Netherlands, or through other systems. In many Asian countries, such as Malaysia and Singapore, Provident Funds were also becoming more important. As a result, the role of the pensioners was changing. Mrs. Mashayekhi quoted from one of Peter Drucker's books in which he referred to a new phenomenon called "capitalism without capitalists" in which the pensioners and their trustees are assuming the role of the classic wealthy people and the classic captains of industry because with this great wealth they were beginning to direct where the funds go and thus where growth goes. With the large funds in the United States, funds like Calpers or TIAA CREF, companies were being directed to change their chairmen, to change their boards, and to change how they run their businesses - all through retirement money. Therefore, the role of people like the 1818 Society members. the pensioners, was becoming more and more important every day. Mrs. Mashayekhi also noted that the Bank had a defined benefit plan. She said that this fact was also emphasized in this year's annual report which will be going out very shortly. The Pension Department wanted to bring this to the attention of all staff, and especially for the new staff coming in, so that they do not forget the fact that the Bank has certain obligations. Regardless of whether returns go up or down, pensions were defined benefits and the Bank had to take and, indeed, has taken a fiscally sound approach to

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funding the Plan. Each year an actuarial evaluation of the Plan is carried out whereby a projection is made of the money that must be invested in the Fund and what is needed to meet the obligations. As aresult, the Bank's Pension Fund was actually one of the most well-funded. At the moment, the total number of pensioners were a little over 3000 with the active members numbering over 7000. and the Pension Fund was just under $6 billion. That was considered a very well-funded Pension Plan - at least for the present group of retirees. Mrs. Mashayekhi then talked about the fund's performance last year ( 1994). Looking at what happened in the markets last year, she said, US equity prices declined modestly in 1994 with sharply higher interest rates. despite increases in corporate profitability Lvith increases in productivitl . Over the year. there was a tlight to quality in 1994 as investors began to fear the impact of rising interest rates worldwide. The return on non-US equities was below average, under-performing the US equity market. The Penhion Fund's asset allocation was about 82'7- equity and quasi-equity. and 18% fixed income. About 50% of the total was in international assets. which was a very high share. Thus non-CS equities were obviously an important area ulien looking at the perfol-niance. The returns on private equity continued to be strong in 1994 and real estate became attractively priced relative to bonds and stocks. A modest increase in demand and a collapse in new constl.uction was partly upset by the upward move in mortgage rates. Another area which did not do at all well last year was the area of fixed income. Indeed. 1994 was one of the wor.st years for this typz of in\,estment. Looking at the Plan's performance, the Fund lost ?round in 1994. Because of market difficulties, the value of the Fund's net assets fell from S5.588.000.000 to $5.522,000,00 - a negative return of 2 . 2 7 ~ . With the benchmark portfolio donin itself about 0.5%. the Fund ended up 1.7% below the benchmark In other words, the benchmark portfolio that the Fund's performance is

measured against was negative 0.5 and the Fund negative 1.7%. This was mainly because of the larger allocations to international equities, including emerging markets as well as currency hedging into dollars, as dollars depreciated relative to other currencies. US equities showed a 1 % gain in the Fund compared with a return of 1.3% for the S & P Stock Index. International equities, as actually hedged, declined 2.3% and that, Mrs. Mashayekhi explained, was where the big hit was compared with the fall in the hedged policy benchmark return of negative 1.5 %. Overall, active management added value with stock selection offsetting the under-weighing in Japan as that asset class outperformed the benchmark on an unhedged basis. The real estate area did quite well and the sector posted 6.5% gains as compared to the benchmark return of 5.7%. Venture capital and special situations were the best-performing investments with returns up 1 1.5% while the benchmark was up 9.7%. High yield bonds outperformed their benchmark in a declining market. The sector returns were a negative 0.8% for the year compared with the benchmark return of 0.9%. The Pension Fund was also invested in hedge funds which were the worst-performing asset class last year showing areturn of negative 12.3% compared to a benchmark return of 4.6%. Mrs. Mashayekhi reminded the group that the Fund had been invested in hedge funds for many years, but in the past, they were not reported on separately. Hedge funds were now separated out rather than being lumped together with other investments. These investments had not done badly over the last eight or nine years. Last year, however. the Fund did not do at all well in that area. The US fixed income sector under-performed its benchmark by 30 basis points, declining 3.2% while the benchmark for the Pension Department, which is the Salomon Brothers Broad Investment Grade Index, declined 2.9%. NonUS fixed income investments declined 10.8% while the hedge benchmark return fell about

4.5%. For those interested in the details, the Pension Fund's Annual Report will be available shortly. Mrs. Mashayekhi expressed her appreciation to Shirley Boskey, Al Raizen and Stephen Eccles for their very helpful comments on the draft report. She went on to say that the first half of 1995 has been relatively better than 1994, but again performance had not been great because the Fund was overhedged into dollars, and the dollar had only recently started appreciating. This year, however, the Fund was much closer to the benchmark and on the positive side not on the negative side. There were a number ofchanges in the Pension Department since last year. Mrs. Mashayekhi, herself, was new, having joined the Department at the end of 1994 taking over from Nestor Santiago who had moved to the IMF. Charles Chih. who runs the Pension Administration area, was the point of continuity, although he. too, was a relative newcomer. On the Pension Investment side. there were also a few changes. The in-house staff had been strengthened on the investment side with some people from within the Bank's Treasurers' Department who have very strong market backgrounds but also risk management backgrounds. The PensionIInvestment Division now hadateam of about seven or sight people. Mrs. klashayekhi suggested that. if at any time there was enough interest, the Department could make a presentation. perhaps closer to the new year, providing greaterdetails on the markets and possibly something about Pension Ad~ninistration,since Charles Chih had introduced a number of innovations in their processes which might be of general interest. In terms of organization. an important change was made in the management of the Bank's assets. In 1987 a decision was made to use the services of Strategic Investment Partners, a firm comprised of the group that had been managing the assets of the Bank internally as the Investment Division. They left the Bank at that time and the decision was taken to have them continue

with the management of the assets after they s~ up their own management group. Now, however, there was a feeling on the pa: of senior management in the Bank, that there ha been an evolution in terms of staffing and re sources within the Bank while, at the same time Strategic Investment Partners had also evolved This year seemed an appropriate time to par company. The management made a recommendation to the Pension Finance Committee about or 4 weeks before the Society's Annual Meeting to terminate the relationship. The main factor behind the decision was that it was not industry practice for a Pension Fund the size of the Bank's to have an intermediary between itself and external managers. In addition, risk management had become extremely important in the area of asset management and the morelevelsof intermediation there are, the greater the risks. Cost and performance, of course, were other factors. The Pension Fund Committee made an unanimous decision to bring the assets in-house. This does not mean that the investments are to be managed internally, but that the management of those managers will be brought in house. At the end of Mrs. Mashayekhi's presentation, there was one question about possible changes in the way the CPI is calculated. There is some discussion in the United States as to whether the CPI overstates the actual rise in consumer prices, and there was pressure to alter it. Estimates of an overstatement range between 0.2% to in excess of 1%. If the method of calculating the CPI changes, it will, of course, affect Bank pensions. Was the Pension Department doing any contingent planning in this regard and, if so, on what basis? Mrs. Mashayekhi replied that so far nothing had occurred to require the Pension Department to undertake studies or to make any changes. If and when there were changes in the base or anything else, it would, of course, be addressed. Anotherquestionconcerned taxes on pensions. One member of the society said that the Bank's system was not clear. Charles Chih responded to

this question. He explained that Bank staff are paid a net salary. Those who have to pay tax receive a tax allowance. For the pension, however, there was a grossing up. The assumption is that gross pension includes the tax component. That allowance is based on three countries tax rates: that of the US, Germany and France, and it is a composite average of those three tax rates which is used to gross up the pensions. This meant that the pension included a tax component.

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I ~ ! S Z O ~ O ; I~HCL ZC~ T ~ I - Y . The Chairman introduced two speakers: Brian Donnolley, acting for Mark Boyer who was on mission, to deal with the policy aspects of insurance and Deborah Wright with insurance administration. In spite of the hope, which the Chairman had expressed earlier, that there would not be turbulence in this area over the coming year, the speakers did not paint a particularly rosy picture for the future. Mr. Donnolley began his presentation by talking about the cost of the Medical Insurance Plan (MIP) and how it was funded. He said that, currently. there are some 1800 retirees who were members of the special MIP set up for retirees. About 1000 of' these were in the United States and the other SO0 were in various places throughout the world. The overall cost of this plan was $1 I million on an annual basis and, dividing $1 1 million by the number of participants, the cost per participant each year was about $8500 or the gross cost of $710 a month. The individual contributions to that Plan range between $25 and $262. Since 1991, the Bank has agreed to contribute 75% of the cost of the Plan; the other 25% is met by the participants. Mr. Donnolley brought everyone's attention to the crisis in medical costs in this country and to the fact that Congress was now focusing on Medicare costs, on ways to save Medicare, and looking to the future of the program. With the continuing aging of the population, people living longer, medical costs were going to increase and were going to escalate on a continuing basis. In an environment in which medical costs are

going up, and they will go up for quite sometime, there were very few solutions to as to how to meet those costs. You could pay more, you could try and save money and, Mr. Donnolley noted, the Plan had been trying to save money over the last few years with a special pharmacy plan and other steps, or you could increase the cost of the contributions. While no firm decision had been made about what will happen with the MIP next year, several measures were being considered to address rising costs. Increasing the cost of contributions was one possibility, though it was not necessarily the only way to do it. Another possibility was to look at the deductible and another was to adjust the ceilings on the various out-of-pocket expenses. These and other scenarios were currently being considered and a decision would be taken within the next couple of months. Mrs. Wright then spoke about recent developments in insurance administration. Earlier this year the Bank introduced and renegotiated a Preferred Pharmacy Program for both active staff and retirees - a program managed by Pharmacare, Inc. The retail outlet for this remains CVS in the Washington area. But there were some changes; in fact improvements to the program which directly affect the retirees. Also this year, a simple questionnaire was sent out asking for some basic information about participants in the MIP as well as their dependents who participate in the MIP. That information was incorporated into an electronic data base which has been provided to Pharmacare, Inc. and to New York Life in an effort to automate the system and, presumably, to make it more efficient. Pharmacare sent out, sometime in September, information about the new Pharmacare program and new Pharmacare IDSfor participants and any adult dependent spouse and any adult dependent children. The new Pharmacare drug card can be used not only to obtain discounted prescription drugs in CVS in the local area, but also extends that program through a network of pharmacies to many pharmacies throughout the country. For

those who do not live in the Washington area or for those who travel frequently (to Florida or the West Coast, for example), it is now easier to get discounted prescription drugs. Mrs. Wright apologized for some minor teething problems with the program. She mentioned some billing problems, and the fact that the prescription receipts were a little confusing. She said that the Bank had now persuaded CVS and Pharmacare to simplify that. The other change to the program which became effective on January 1, 1995 was the introduction of usual and customary limits on items that had previously not been limited. Mrs. Wright said that this had taken a little bit of time for both the active staff and the retirees to get used to, and that. in some cases, it had created problems. She explained that most indemnity insurance plans have an upper limit on the amount for which they will reimburse for medical or dental expense. The Bank's plan, the retiree MIP and the active plan. traditionally had been at an extremely high level of reimbursement -reimbursing, on average, at about the 97th percentile of the fees for a given zip code area.* There were two key areas - lab fees such as radiology and pathology and office visits - that had not. prior to January 1995. ever been limited. Effective January 1995, the Bank reduced reimbursements to about the 90th percentile and, for the first time. limits on lab fees and office visits were applied. As a result, in 1995 many people had letters back from NY Life showing what is called a "cut back" in the amount of the fee. This "cut back" is shown on the form as a not-covered charge. There have been a number ofcomplaints about this and many people felt that NY Life was being arbitrary in the fees i t was allowing or disallowing. Mrs. Wright assured the group that. in factl these customary and usual "cut backs" were part of the contract between the Bank and NY Life with regard to the MIP. and that the tables used were applied by NY "The fees are adjustedon average about w i c e a year for zip code3 in the US. and for fees outside the US. there is a further adjustment.

Life to all of its group insurance programs. They are adjusted every six months. The Bank reviews "cut backs" in the aggregate and keeps a very close eye on it. In some cases, the doctor or the dentist may have billed incorrectly; for example. using the code for a simple procedure when a complex procedure had actually been performed. This had been happening, but once clarified. NY Life has adjusted the fee and processed the claim. There might be other problems that the NY Life Claims Office should be aware of. If NY Life was not being responsive or if there were other service issues, Mrs. Wright said that her office should be informed and that they would take up these issues with NY Life. Another area where there was a small problem last year was in the local currency program. This was a program started about a year and a half ago whereby MIP reimbursements can be in a currency other than US dollars. On the whole it has been very successful with retirees in about 20 countries around the world participating in the program. However, there was a recent problem in Germany where the German banks werecharging an additional fee or commission. This has now been correctedand Mrs. Wright said that she would now write to the individuals who had written her about this problem and also to the Society. Mrs. Wright then reiterated the point raised by Mr. Donnolley; i.e., that since the Bank is subsidizing the MIP for retirees by 75%, when medical costs go up, that percentage must remain the same. That means the only recourse is to either seek additional contributions or to reduce the plan costs by reducing the benefit levels. She went on to say that, while she did not yet know what the changes would be this year. it had been well over a year without a rate change, although most of the limits were reviewed and some of the limits and internal deductibles were adjusted in January 1994 and January 1995. When the changes have been decided, probably sometime in November, participants in the MIP will be informed.

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Also this year, the Retirees Certificate of Insurance was sent out in JuneIJuly. It's also being handed out to new retirees as they retire. Mrs. Wright said that there had been some administrative. internal organizational changes in the Bank recently. Effective July 1 of this year, the Insurance Unit and Benefits Unit merged, and there is now just a Benefits Administration Unit. Mrs. Wright is now responsible foradministering benefits including insurance. A question was asked about contingency planning for proposed Medicare reforms. Since retirees, when they reach the appropriate age, are requested to join Medicare, and it looks very likely that the premia, the monthly premia, will be increased. was the Bank giving any thought to what changes might be needed in its insurance program depending on the Medicare changes introduced in the United States. Mrs. Wright responded that the issue was being looked at on the policy side. but that while things were still uncertain, it was not possible to say how proposed changes would affect the coordination provisions. They would have to wait and see what, if anything. Congress actually did. Another comment concerned solicitation calls from local chapters of NY Life. She urged anyone who received such phone calls in the future to immediately refer the caller to her. Hans Pollan, representing the German-speaking countries. said that there were a number of questions raised at their meeting a couple of weeks ago, and that he had also received a number of faxes from one of the committee members asking him to take up a few issues. Rather than take up time at the meeting, however, he said he would make an appointment to discuss these issues after the annual meetins. The Chairman added that a number of retirees overseas who had written to people in the Bank without getting much response, have also written to the Society. The Society had been somewhat more successful in finding answers to their problems. She found the Claims Director of NY Life to be extremely responsive and very helpful and, while not urging new business for the next Society administration, she suggested that copies of

letters going to NY Life or to other parts of the Bank raising problems should come to the Society. The Society can then follow up and ensure that the issue doesn't get buried.

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The Chairman changed the order of the agenda slightly at this point in order to take up the amendments to the by-laws before the elections. The amendment to Article IV was considered first. The by-laws now provide that 5% of the voting membership will constitute a quorum. The Chairman explained that while that was practical when the Society's membership was very small, now that it has grown, many more people are needed for a quorum than usually attend the meetings. Rather than taking care of it by proxies every time, the Board proposed to change the percentage requirement to a flat number, namely that 60 members entitled to vote would constitute a quorum. The Chairman noted that a quorum was needed to change the quorum. Luckily, at this year's meeting, there was a larger attendance of voting members than normal. The Board had also taken the precaution of obtaining proxies. With the quorum present, a motion was then made to amend Article IV to change the first sentence to provide that 60 members entitled to vote shall constitute a quorum. The motion was seconded and adopted. The second proposed change to the by-laws concerned eligibility for membership in the Society. Some years ago there was added to the eligibility provision, a category of persons who had left the service of the World Bank as part of the 1987 reorganization and who had served ten years in the Bank. When the Board looked at this provision, i t concluded that it really ought to be deleted because it has obviously served its purpose. Anyone who was eligible under that provision has long since joined the Society or decided not to join. The Board also considered the provision too restricted. It referred only to the 1987 Reorganization because, the Chairman said, at the time the

Board naively supposed that there wouldn't be any other reorganizations. Simply omitting reference to 1987 was not sufficient because reorganizations in the Bank were not always called reorganizations. What was going on in the Bank at the moment was called a downsizing or, as the President of the Bank referred to it, a "rightsizing". The Board concluded that it was a mistake to categorize anything in the Bank, and proposed deleting the provision entirely. The Chairman then turned to the second eligibility provision in the By-Laws which extended eligibility to former participants in the Plan who had served ten years and who had reached age 55. The provision covering the 1987 Reorganization had a ten-year service requirement, but no age requirement. The Board could see no reason for the age requirement in the second provision, althoush it felt that the service requirement was important. Therefore. the Board proposed that the age 55 criterion be stricken while leaving the 10-year Bank service requirement. Another provision, the draft of which was distributed only at the meeting, would extend eligibility for membership to individuals on Special Leave or in such other status as the Board of Directors may approve for membership and who have served ten years in the Bank. The reason for that provision was that there have been, from time to time. requests to join the Society from staff who were on Special Leave and who might be on Special Leave for almost two years. It did not seem reasonable to make them wait, and, in fact, there were a few members of the Society who were admitted at the time they were on Special Leave even though they were not yet officially "former" Bank staff. Therefore, the Board put in the specific reference to individuals on Special Leave. But then again, having in mind the Bank's creative imagination, the Board felt the provision should also include the catch-all "such other status as the Board of Directors may approve for membership" in case the Bankcame up with some other unforeseen category. The requirement of ten years of service in the World Bank has been preserved.

Before asking for comments and questions, the Chairman added that the changes in the provisions were all designed with the idea that the Society should be an inclusive organization rather than anexclusive one; that if there were individuals who were going to be ultimately entitled to a pension and who wanted to join the Society, the Society should do its best to accept them while, at the same time, being in conformity with the By-Laws. A motion to approve the amendment was made. seconded and canied.

There were five directors of the Society who were retiring- Doreen Crompton, Eugenio Lari, Bert van der Meer, Greg Votaw and Shirley Boskey were all completing their terms of office. The nominatingcommittee proposed that Eugenio Lari be re-elected as Director and that the other vacancies be filled by Curt Carnemark, Zeyneb Lange, Fernando Mendoza, and Barbara Searle. The Chairman did not feel it was necessary to say anything about Eugenio Lari since he was already a Director and was well known to the membership. Curt Carnemark joined the Bank in 1966 where he started off in the Urban and Transportation Department. He then went to the East Asia and Pacific Region again in transportation. Subsequently he worked in the Water and Sanitation sector. In 1992, he came to the External Relations Department, making use of another talent - photography. He came to External Relations to ensure that visual images were part of Bank work. Then he moved back to the policy side in the Transport, Water and Urban Development Department and he retired in 1993. He is very interested in the idea of a Travel Committee for the Bank and has already proposed that he might lead a photographic safari. The next nomination is for another 1966 entrant to the Bank. FernandoMendoza, whojoined the YP program on October 6, 1966. He also went into the transportation field as a YP, but when he finished his YP assignment, he became a Loan Officer for Morocco. He worked in the Middle East, Latin American, Africa, and East-

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ern Europe. He then went to Bolivia as Resident Representative and in 1993, he became Resident Representative in Zambia. Zeyneb Lange came to the Bank in 1981 where she started in the External Relations Department. After that. she went to the office of the Regional Vice President for Africaand she stayed with the Africa Region, ending as Administrative Officer for the Global Coalition for Africa. Barbara Searle also came to the Bank in 1981. She began in Central Projects, moved to East Asia and Pacific and then, after the 1987 Reorganization, to the China Department. She retired from the Bank as Ombudsman. The Chairman proposed that all five be approved unanimously and as a group. The motion was made. seconded and carried. The Chairman then moved to the final recommendation. i.e. that Mr. Lari not only be elected Director, but that he be elected President. The motion was made, seconded and approved. P~I!LIIII.L~. The Chairman called on the Treasurer, Colin Davis. to say something about the state of the Society's finances. She said that, in the past, a summary of the financial statement was given to all participants at the Society's Annual Meeting, but having discovered that most of the copies were left behind at the end of the meeting, copies are now made available only on request. Mr. Davis said that he had become Treasurer on the 1st of July of this year and, that the statement that was prepared for 1994 and compared with 1993 was prepared by the previous Treasurer. He said he had reviewed it and that John Bladen. a former Society Treasurer who had served as auditor, had also given his approval. Most of the items on the income and expense compensated each other because all of the social functions were paid for by the participants. The only items of income were the membership fees and the interest income on the Credit Union Savings accounts. And the only real

expenses were miscellaneous expenses. There was a slight cost to the Society on lunch and buffets, because there were usually guest speakers. Orher- Busirre.s.r. Hans Pollan brought greetings from the Chapter of German-speaking Countries (of which there are four). Two weeks ago, he said, they held their annual meeting in his home village in Austria. There were 54 people there and he thought that everyone there had a splendid time. They had a marvelous speaker from the Bank, Andrew Steer, who spoke on the environment and a number of macroeconomic issues. He also reported on the latest scuttlebutt about the Bank about which there was considerable interest. The GermanSpeaking Chapter usually holds its meeting shortly before the Annual Meeting of the Bank. Next year it will be in or near Dresden. He said the most important benefit of these meetings was that there was a very strong feeling of conviviality. A more detailed report will be submitted from the committees. Jose Bronfman then expressed his recognition and thanks to Shirley Boskey and to other outgoing members of the Board for the work that they had done for all of the Society members. He also expressed his gratitude to the editors of the Newsletter which, he said, he waited anxiously to receive. The Chairman expressed her thanks to Douglas Fontein who, 8 years ago, became an honorary member of the Board in the expectation that he would serve for two years only. She assured him that he was now freed from that not too onerous obligation. Mr. Fontein said he left with no regrets but with great pleasure knowing that Shirley Boskey would be succeeding him in this position and another source of pleasure was in knowing that Eugenio Lari would be the next President.

.~~YJO~~/-/I)~IC~IT. There being no other business, the meeting adjourned to the dining room, where the participants were joined by spouses, guests and other Society members for a buffet meal. ,.,:.i

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At the dinner, Mr. Lari, the new President of The 18 18 Society presented the out-going President, Shirley Boskey, with agift of a beautifully worked pewter cocktail set, designed and executed by a local artist. In his brief remarks, he said that Shirley Boskey had set the standards, both in substance and in style, by which all future Presidents of The 18 18 Society would be measured. In her eight years at the helm of the Society she had shown 5terling leadership qualities. Among her many virtues. she consistently evidenced fairness, integrity and firmness of character. She had always acted promptly. with acumen, goodjudgment, and great tact to present, resolve, or at least minimize problems for the retirees. She provided constructive, timely comments when new Bank policies or changes in Bank policies dealing with retirees were introduced. She dealt with specific hardship cases firmly but with empathy, balancing in an exemplary way the needs of the

individuals with the broad interests of the institution. She promoted a series of highly acclaimed activities and social events. By her example, in words and actions, she had inspired the several directors who, over the eight years, had worked with her. She had quickly gained their respect and affection; indeed she had earned the respect and affection of all the retirees and members of The 18 18 Society. Recognition should also be made of the support given by her husband, Bennett, vindicating the old saying that behind a great person, there was generally a great spouse. He went on to say that Shirley would remain everybody hopes and expects - not only an honorary member of the Board, but a very active one. providing, for many years to come, good judgment, new ideas and overall leadership. Following Mr. Lari's speech, Monique DeKok presented Mrs. Boskey with an enormous bouquet of flowers.

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Nursing Home Ratings. For those of you who are interested in learning more about nursing home care, the August issue of Consumer Reports has a special article on nursing homes in the U.S. which also rates 43 nursing-home chains on the basis of critical deficiencies that relate directly to residents' health and well-being. The September issue covers issues related to the costs of nursing home care.

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Post Retirement Forays into Politcal Economy and Voluntary Work The world owe a large debt to Shirley Boskey and her many helpers. They have given freely of their time so that we retirees have a forum for maintaining relations with each other and with the World Bank through the 18 18 Society. One part of me has long felt that I should contribute to the 1818 Society Newsletter, but the rest of me has been cyliical. Few readers would be interested in my doinss, I have suspected. And yet I have been captivated by some of the accounts of how retirees have bounced back instantly or struggled o \ er a period of time after leaving the cocoon of the Bank to find a new niche. Inspired by the contrihutionx of my fellow retirees, I am now persuaded to u rite about two things I have done during ths eight years since leaving the bank at the age 01'53. It is difficult to say if I have reached a new equilibrium yet. --

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My very first activity was to write about econornic policy change in Africa. As chief economist of the then Eastern Africa Region of the Bank, I had been intimately involved with SALs and SECALx. but found it difficult to understand \vhy some of these loans worked much better than others. To answer this question, I found myself reading the literature on political economy. No longer facin? the bureaucratic deadlines, I had the time to delve into aspects that the Bank tended to neglect at its own . and peril. I did case studies on M a l a ~ . iZambia Mauritius. Also, I did a fourth essay that tried to assess, more generally, the processes of policy change in Africa. This work was very rewarding for me. These essays were published and won me some recognition both inside and outside the Bank. Most fellow retirees I talked to found it difficult to

appreciate what I was doing and why I was doing it. They attributed it to my bookishness, my eccentricity and my proclivity to take on the establishment. The second activity was (and is) voluntary work. The inspiration was provided by my wife, Kaval. She had founded a non-profit organization in Washington during the 1970s. From this platform. she had become familiar with the special universe of non-profit organizations, also called NGOs in the language of the UN. After Kaval retired, both of us decided to start a taxexempt foundation of our own. We call it Unniti, a Sanskrit word meaning progress. The aim of Unniti is to help the poor in lndia and in other South Asian countries to stand on their own feet. Mahmud Burney, a fellow Bank retiree, and his wife Cecille have joined us in this enterprise. At the outset, Unniti is focusing particularly on the grim condition of girls and young n.omen in the rural areas of Rajasthan and hladhyapradesh. These two states of India are large in terms of area and population. They lag far behind states in the South and the West of the country in terms of social and economic change. So far Unniti has used funds that Kaval and I have contributed to start a number of projects around Delhi, Jaipur and the Kutch district of Gujarat. These involve training in literacy, numeracy, hygiene, nutrition and gender awareness. We are amazed at how much can be done with very little money. provided there is commitment and empathy. Visiting these projects and talking with field workers and beneficiaries has become a favorite occupation. These journeys have acquired a special significance in our lives. We are aware that what we are doing is a drop in the ocean. Given the large magnitude of the problem we are tackling, a little bit here and there does not make much of a difference. Already we find that there are many more worthwhile projects

than funds available to Unniti. This is a depressing feeling, but we have not allowed it to paralyze US. One of our responses is to invite others in India and here in the USA to support Unniti by contributing funds. We are aware, however, that even a greatly enlarged Unniti cannot hope to make much of an impact. Our other response, therefore, is to undertake a policy research and advocacy effort so that the entire context of voluntary work in India improves, thereby helping girl children and young women across the country. We joined the Center for Policy Research in Delhi, a respected think-tank. to do this work. We produced a policy-oriented book entitled "Strengthening Voluntary Action in India." On the basis of 13, case studies drawn from Rajasthan and Gujarat. ah well as other material, we con-

cluded that the existing environment for voluntary action was 'disabling'. Profound changes are required in the government's regulatory frame, in the quality and extent of mediacoverage and in corporate philanthropy to realize the full potential of voluntary action. Not content with publishing a book, we organized five seminars in Delhi earlier this year to discuss our findings and recommendations with different categories of policy actors. Much more policy work, both research and advocacy, is needed to change attitudes, however. We have plenty more to do. There is a rich life, a fulfilling life, beyond the Bank, we have found. If interested in the work of Unniti, please contact us at 202-965-9307 during May through December.

The Hazards ol'2 California Retirement It happened 17 months ago. It was in the middle of the night -a beautiful night with a sky of dark blue velvet and hundreds of stars so huge that I could almost touch them. They were blinking over the Santa Monica Mountains and the closeby canyons as 1 stood. paler than the moon and frozen in shock in front of my window. A few minutes earlier, at 3:31 a.m., I felt as if I was on a ship shaken by the most ferocious tempest I had ever seen, even in a movie. Except that it was not a ship, it n.as not a tempest, and it was not a movie. It was my life, my bed and an earthquake which registered 6.8 on the Richter Scale. It had been barely three months since I had settled in my new home after retiring from my career at the Bank. I did not jump out of bed to stand under a doorway as I had been advised to do by friends and neighbors after my arrival in beautiful, sunny California. I had no idea where to find the battery to put in the transistor radio. For that matter. the radio was probably in one of the boxes still unopened since my big move. As

I muttered "0 mon Dieu!"over ando~fer. the silly idea crossed my mind that I had to bruhh my teeth -as if doing so would eradicate the nightmare. and put everything back where it belonged at 4:30 in the morning. Brushing my teeth became my most urgent priority as I tried to make my way to the bathroom in the dark. After all, there might well be days -even weeks -without water and other utilities. But then 1 began to fear that the shaking would return soon and that I should be hiding under a desk or a table. As I made my way to the dining room, I saw the sky through a window. The sight was frightening. The huge stars seemed too low over the Santa Monica Mountains. and all the street lights on the hillside above Sunset Boulevard were blinking furiously, as if trying to prevent the total power failure which materialized only minutes later. Cowering under my tabletop in the dark, I was overcome by sheer terror and my mind went totally blank. I don't know how long it lasted. When I finally

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emerged from hiding, I tried to remember where I, a non-smoker, might have put the matchbooks which I routinely pick up at memorable restaurants. I made my way to the kitchen, arms outstretched in front of me. found a cabinet drawer, and rummaged inside. With relief, I found what I was looking for - matches and, nearby, Christmas candles. For a second, I felt as excited and full of wonder as a cavewoman discovering fire for the first time. I lit the candles, put them in holders and set them on the table. I saw the telephone on a stand nearby. I knew it must be dead since I had been told it was always the first thing to go. I don't know how long I stared at it. unthinking, frozen like a statue. And then, a shrill sound. I jumped, but it was only the telephone. Only the telephone? The digital clock on the wall had stopped, but a tiny hand wound clock which had belonged to my mother was still ticking. Five hours had passed since the quake. It didn't seem possible. I picked up the receiver. A frantic voice that of my daughter, who lives about amile away. She was O.K., she said. Was I'? And then I

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realized that I, Mom, whose main concern is my child, who would jump through blazing fires to save her life, who would gladly accept any personal hardship to buy her happiness, had totally forgotten about her. She will never know and I will never understand it. Is this what terror does? Weeks, even months later, people on the streets of my small and charming village-by-the-sea, would nod to each other with a knowing look. W e felt bound by a shared and frightening experience. Even now, 17 months later, 'we jump when a heavy truck goes by or when the ground shakes briefly, as it does from time to time. We were lucky this time. A couple of hours later, many of us would have been driving on the freeways where the death toll would have been devastating. My church, Saint Monica, which was all but destroyed, reopened only two months ago. As I write, a gentle breeze caresses the tall palm trees outside my window. I have just returned from a stroll along the gleaming Pacific Ocean and the sky is very blue. It is all so lovely . . . until next time.

IVaco, Nintendo and Project Evaluation Watching some of the recent Waco hearings, knowing that more were coming on the Ruby Ridge affair and noting another news item to the effect that the US Government Accounting Office (GAO) had produced a new report saying that some program or other was not doing what it should, reminded me of the short time in the twilight of my Bank career spent on project evaluation. I was impressed with the manifold difficulties of this business and became more so as I wrote a book, now performing a useful function by propping up its neighbors in the library, on the Bank's early work on electric power.

Readers who have grandchildren who are proficient at Nintendo games, as I do, will understand when I say that, in project evaluation as in Nintendo, things are fairly straightforward when you are on "Level 1." Even Grandpa can get through level 1 with a few hints from a ten-year old and a bit of practice. In project evaluation the first step, which corresponds to level 1, is to compare what is said in the project document with the facts when the project is completed. No problem. But like Nintendo, when you get to level 2. things become more complicated.' If the project has not worked out as planned, people want to know why and whose fault it was.

Now there are a number of parties involved in a project; there's the Bank, the project agency. the government, the principal contractor, and various consultants. All these people are intelligent and well-intentioned. but they are also human beings, and in this kindof a situation, they tend to point to someone else and say "It's his fault!" Which is why you get Congressional inquiries in the US. and Commissions of Enquiry in Britain. But neither the Bank nor the GAO has either the time or the money to mount anything like the effort which might really be required. So what you get is a lot of personal opinions. When you get to level 3 , things become even murkier. As we all know, projects should really be evaluated over their lifetime. The problem is hat as the time span gets longer. the project's pzrfol-mance gets intertwined with the course of economic events in general. One ends up with some interesting history but also with some skepticism about the effectiveness of human endeavor. For example, in the fifties and sixties, the Bank financed many hydropower projects. and Herman van der Tak developed techniques for determining whether the extracapital required was worthwhile. Now there is no more intelligent and better-intentionedgily than Her~iian.but not even ld what was going to happen to oil he c o ~ ~foresee prices. When i t did, thobe who had got their hydro-projects built thanked God, or Allah, or whatever deity they deemed appropriate. while those who had not. gnashed their teeth and incurred balance of payments deficits. And I ha\.e a more cogent example. A little more than a hundred years ago there was a king of Bavaria who was very roniantic and a bit nuts. Ludwig I1 got the castle-building bug with results that I'm sure you all know. His most famous creation. Neuschwanstein, is a perennial on calendars, travel posters, etc. He built another castle about fifteen miles from Neuschwanstein and a third on an island in the Chiemsee. But his ministers got very upset with what they regarded as a dreadful waste of money and they determined to get rid of him. They sot some doctors who were presumably the equivalent of today's

shrinks and these gentlemen duly certified that the king was officially off his rocker. The ministers then deposed him and placed him under a form of house arrest. A few days later he set off with a companion for a walk by a lake. When they did not return, search parties were sent out, and eventually the bodies of both men were found drowned in the lake. No one has ever been able to explain what happened. The kinz thus rounded off his romantic life with a suitably mysterious end. I have grave doubts about whether Ludwig's castles would ha1.e qualified for Bank financing, had the Bank existed in his day. They probably wouldn't even have merited a pre-appraisal mission. But now look. Every day throu,ohout the summer, dozens of coaches pour into the vast parking lots which surround the castles. thousands of tourists pour out of them and proceed to purchase souvenirs. film. postcards. 11nd so on. There are countless restaurants where girls in dirndls swirl bet\veen the tables dishins out platefuls of bratwurst and foaming mugs of beer. Just think of the job creation! Hordes of people must be employed maintaining the castles, shepherding the visitors through thetn. selling ruidebooks, histories of Ludivig. jig\a\v piizzles of the castles and surrounding scenes!,. running hotels. driving the coaches. policing the parking lots, etc ... with the help of the consumption multiplier i t goes on forever. The castles have become one of the prime attractions in southern Germany and b ~now . they must have paid for themselves hundreds of thousands of times over. I t just goes to show that, when it comes to long-run project evaluation. as Bernard Shaw said. "You Never Can Tell." L.

' O.K. To be honest. thih i \ the onl~.rc.senihlunceI can find between Nintcndo and project r\;lluation. I t gets harder as YOLI get further into ~ t .

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Remembrance of Missions Past

Washington DC

Breakfast at PIA

November 15, 1995. - Tour of the

by Bernard Chadetzet

National Postal Museum

From September 1974 through 1975, I commuted between Washington and Pakistan because of serious teething trouble affecting the incident-prone dam at Tarbela, the place where Alexander the Great crossed the Indus River in 326 B.C. I had been asked by the then President of the World Bank, Robert McNamara, and by the South Asia Region. to represent the Bank during this period. On one of my return trips to Washinston, during an Islamabad-to-London night flight on Palustan Airlines, we were awakened by the hostess asking if there was a doctor on board. A few minutes later she repeated her request, and I noticed some tension in her voice. Half an hour later. the tension was gone as she, with evident satisfaction, announced the birth of a little girl, Saba Begum. Later, after the lights were turned on for breakfast, I noticed a small basket being passed from row to row. Was it a Proustian reminiscence of a church ceremony I used to find so exciting as a young child during summer holidays because the municipal band blared in the small church and baskets of "pain bCnit" Lvere passed to the parishioners? Expecting croissants, when the basket reached me I was amazed to discover the tiny face of Saba Begum between the sheets. I was delighted by this stylish introduction of a newborn girl to her fellow passengers. Breakfast soon followed. with lawyers wondering aloud about the citizenship of Saba German because she was born over German territory? British because her first encounter with land would be in London? Or Pakistani because of her parents and of common sense?

Coming Events

December 9, 1995. - Hillwood Christmas decorations January 1996 - Luncheon, R. Cheatham, speaker January 16,1996 - Gabriel Investment Seminar March 9, 1996 - Luncheon, James Wolfensohn, speaker May 9,1996.- Kreeger Museum Tour

Australia Information about the Southern Cross Chapter's activities can be obtained from Dawn Anderson, Unit 2, 6 Horace Street, Shoal Bay, NSW 2315 [Tel.: (049) 814-7151 or Margaret Heathers, 73 Ben Boyd Road, Neutral Bay, NSW 7-089 [Tel.: (02) 953-1860].

France Information about the French Chapter's activities can be obtained from the Bank's Paris Office, 6 6 Avenue d'Iena, Paris 75 1 16 [Tel.: (1) 40-69-30-001 C; :r.rnall!; Information about the German Chapter's activities can be obtained from Erdmann Zimmer-Vorhaus, Eifelweg 24a, D53424 Remagen, Germany (Tel. and Fax: 2228-7416).

United Kingdom December 2,3995.-Winter Reunion Lunch, Farmers Club, London May 11/12,1996(tentative). - Annual Meeting, Winchester

Information about the UK Chapter's activities can be obtained from the Bank's London Office, New Zealand House, London SW1 Y4TE [Ph.: (7 1) 930-851 11.

DETAILS OF THE ARRANGEMENTS FOR COMING EVENTS WILL BE SENT OUT BY THE SOCIETY AND CHAPTERS, RESPECTIVELY.

Bulletin Board ' Home Exchange Key West. Florida. Richard Clements wishes to exchange his home in Key West, Florida for an apartment in Paris. Vienna. London or other European city for 1-9- months during 1996. preferably in the Spring. Richard's home is a inodernized old Key West house six blocks from the ocean. with 3 bedrooms13 bathrooms and small back yard \\ith swimming pool. Weekly housekeeping and yard s e r ~ i c would e be provided. Other suggestions for home exchanges would be welcome. Please contact Richard at 12 13 Royal Street, Key West. FL 33040: telephone (305) 294-7450.

Retiree Discounts The FEND1 boutique at Fairfax Square, 8045 Leesburg Pike. Vienna. Virginia is offering a 10% discount on parcha5es (escluding Fragrances :ind watches) to World Banh retirees. The 1 0 9 dibcount is also allowed on sale items. Hoaever. to receive the discount. it is necessary to present a copy of their letter announcing the discount for World Bank retirees. Copies are available in the Society office. At the moment, the offer is \-did through December 1995. hut it will be extended. ' Elder Care Resource Fair The Fair. jponsored hy the World BanklIMF Work Family Resource Center. will be held So\.ember 28 from 11:OO a.m. to 2:OO p.m. in the World Bank H-Auditorium. Professional>and service pro\.iders from over 4 0 local organization\, including housing. elder law, Financial services, and senior center.;. will be available to discuss their services. Meet the exhibitors and pick up tip sheets. brochures. and other infor~nativematerial on choosingoptions for elder care.

Seminar - Caring for Elderly Relatives as a Family Sponsored by the Work Family Resource Center. the seminar will be presented from I2:OO noon to I :00 p.m. on December I2 in the World Bank - Room G-5-9-20. Discussion and viewing of "Where Do We G o from Here?". Join Stephanie Kay, Elder Care Counselor. to talk about the variety of feelings surrounding care-giving. Bank-IkIF Christmas Concert The Bank-IbiF Choir will give its annual Christmas concert on December 13 and 14. 1995. Locations are still to be decided upon. The program will include A Day for Dancing". "Wassail Song" bq Vuughan Williams. and "Dab Neugeborne Kindelein" by Buxtehude. "

Investment Club George Bain is organizing a meeting to discuss the possibility of organizing an investment club for members of the WBVS and of The 18 18 Society. The idea for the club has grown out of a series of meetings held in Maryland and Virginia, called "Money Matters", mentioned in Mosaic, the bulletin of the WBVS. The proposed club would not be associated with either WBVS o r The 1818 Society, but would be organized under the auspices of The National Association of Investment Clubs. It is proposed that the club obtain a tax identification number s o that tax matters would be the concern of the club. Other aspects of the organization will be discussed at the meeting. An initial maximum membership of about 25 is contemplated. The meeting will be held on Wednesday. Januar) 3 I , 1996 at 10:OO a.m. in the home of Mr. and Mrs. George Bain. 9500 Liberty Tree Lane. Vienna, Virginia(703) 281- 1097. Please write or telephone Mr. Bain to ~ndicateyour interest as space is limited.

The 1818 Societv 1818 H Street, NW Room E 1-035 Washington, DC 20433, USA Telephone: (202) 458-1956 President and Board Chairman Eugenio Lari Board Members Curt Carnemark, Chandra S. Hardy. Zeyneb Lange, Fernando Mendoza, V.Rajagopalan, Barbara Searle. Shirley Boskey (Honorary Member) Officers Vice President Mary Wolfe V. Rajagopalan Treasurer Colin Davis Assistant Treasurer Vincent Riley Secretary Verna Via Ass~stantSecretary Vacant

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1818 Society Newsletter

Editor Assistant Editor

Anne Vaughn Hayley Goris

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