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Seminannual Report on Project Administration and Technical Assistance Implementation for the Period Ending 30 June 1999 : Country Implementation Highlights
Korea, Republic ofThe number of ongoing loans remained at two with no loans approved or closed during the period. Both loans were rated as satisfactory (one highly) in terms of both implementation progress and development objectives. Substantial progress was achieved in implementing the policy measures under the Financial Sector Program loan approved in December 1997. This loan, together with a related TA loan, are the only ones being implemented in the country. Releases of the first three tranches under the program loan were in accordance with the projections at appraisal, thus, implementation of the loan was rated highly satisfactory. The remaining conditions for the release of the final tranche, scheduled in December 1999, are being assessed. On the related TA loan for institutional strengthening of the financial sector, the Government's commitment to reforms is considered strong. Consultants are reviewing and advising on measures to strengthen the institutional capability of the financial agencies of the Government. This loan is rated as satisfactory. The Government requested the Bank to consider modifying the scope of the TA loan to encompass two components: (i) management consulting services for commercial banks and other financial institutions for diagnostic reviews, mergers and acquisitions, training, and advice on restructuring and foreign capital inducement; and (ii) strengthening various aspects of the loan recovery operations of Korea Asset Management Corporation. The Government's request was approved by the Bank during the period under review, and implementation of the revised scope is proceeding. Contract awards and commitments reached $3.8 million, or 48 percent of the semiannual projection of $8.0 million and 1.2 percent of the annual projection of $313.0 million. Disbursements reached $3.5 million, or 115 percent of the semiannual projection of $3.0 million and only 1 percent of the annual projection of $310.0 million. The disbursement ratio was only 1.1 percent against the projection of 98 percent, a large decrease from 49.7 percent as of 30 June 1998 as there was no tranche release from the program loan during the period. Net resource transfer also declined from $915.0 million as of 30 June 1998 to a negative $123.7 million as of 30 June 1999 due to low disbursements and high loan service payments. The audited project accounts and financial statements were not due for one loan, while for the other, audit submissions were not needed as it is a program loan. Environmental and social covenants did not apply to the two loans. Tables 33 and 34 summarize the data for the Republic of Korea.  
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