a new interim arrangement in accordance with Article 22(1) of the Convention, whereby participating carriers have agreed, in cases of the death, wounding, or other bodily injury of a passenger, to limits of liability of $75,000 per passenger inclusive of legal fees and costs (or $58,000 exclusive of legal fees and costs in case of a claim brought in a State where provision is made for separate award of legal fees and costs) and have agreed not to avail themselves in any such cases of any defense under Article 20(1) of the Convention, or the Convention as amended by the Hague Protocol. This arrangement is applicable to all international transportation by the carrier as defined in the Convention or the Convention amended by the Hague Protocol which according to the contract of carriage includes a point in the United States of America as a point of origin, point of destination, or agreed stopping place.

as

In view of the acceptance of this arrangement by the great majority of the world's international airlines, including all principal carriers serving the United States, the conditions which led the United States to serve its notice of November 15 have substantially changed. Accordingly, the United States of America believes that its continuing objectives of uniformity of international law and adequate protection for international air travelers will best be assured within the framework of the Warsaw Convention. The United States of America looks forward to participation by all carriers and governments in the provisional arrangement described above and to its acceptance on a world-wide basis. Further, the Government of the United States looks forward to continued discussions looking to an upto-date and permanent international agreement on the important issues dealt with in the Warsaw Convention.69

My Government would appreciate it if the Government of the Polish People's Republic would inform the Government of each of the High Contracting Parties to the Convention of this notification.

For the establishment by the ICAO Council of a Panel of Experts to study limits of liability, June 27, see U.S. Participation in the UN, 1966, p. 174.

INTERNATIONAL DEVELOP

MENT ASSOCIATION

Document II-67

Report of the National Advisory Council on International Monetary and Financial Policies, Submitted March 31, 1967 (Excerpt) T0

Operations of the
International Development
Association During the
Period July 1, 1965-
June 30, 1966

PURPOSES AND FUNCTIONS

The IDA, an affiliate of the World Bank, was established in 1960 to provide long-term development assistance for a growing number of lessdeveloped member countries whose need for, and ability to make use of, outside capital is greater than their ability to service conventional loans. The terms of IDA development credits are accordingly designed to reduce the burden of external debt service carried by these countries. IDA credits are for a term of 50 years and carry no interest. Repayment is made in convertible currencies, with amortization to begin after a 10-year grace period. A service charge of threequarters of 1 percent per annum, payable on amounts disbursed and outstanding, is made to meet IDA's administrative expenses. In view of its liberal lending terms, the IDA is unable to borrow in the market and, as a result, is primarily dependent upon its member countries and upon transfers from the IBRD for funds. Because of the special problems they are designed to meet, IDA's credits have been concentrated in a smaller group of countries than the Bank's loans.

The majority of the Bank's members are also members of the IDA, and voting power is based on subscriptions.

TO H. Doc. 92, 90th Cong., 1st sess., Apr. 3, 1967, pp. 24-30.

The IDA Articles provide for initial subscriptions which would aggregate $1 billion if all members of the Bank became members of the IDA."1 The initial subscriptions of member countries are based upon their subscriptions to the capital stock of the Bank. Under the Articles, however, IDA members are divided into two groups: Part I, or economically advanced countries, and Part II, or lessdeveloped countries. The Part I countries pay their entire subscriptions in gold or convertible currencies, which are freely available for IDA credits, while the Part II countries pay only 10 percent in convertible funds, and the remainder of the subscriptions in their own currencies, which may be used for lending only with the consent of the particular country. In order to sustain its accelerated rate of lending, the Part I members of IDA in 1964 agreed to an increase of $750 million in its usable funds, with payment to be made over a 3-year period, beginning in November 1965. The first installment has already been paid. In addition to these supplementary contributions by the Part I members, the Association's resources have been further replenished by releases of local currency subscriptions by the Part II members, by earned income, by special contributions, and through transfers by way of grants from the International Bank.

MEMBERSHIP, SUBSCRIPTIONS, AND

SUPPLEMENTARY RESOURCES

Membership in the International Bank is a prerequisite to membership in the International Development Association. In the current period, two additional countries-Malawi and Zambia-became members of the Association, with subscriptions of $760,000 and $2,690,000, respectively, thereby increasing the membership to 96, including 18 Part I and 78 Part II countries. The Board of Governors also approved the applications for membership of Guinea and Trinidad and Tobago, with subscriptions of $1,010,000 and $1,350,000, respectively.

On June 30, 1966, total subscriptions and supplementary resources of the IDA amounted to the equivalent of approximately $1.8 billion (see table 9). As indicated in table 10, the cumulative total of lendable funds avail

See American Foreign Policy: Current Documents, 1960, p. 140.

able to the IDA through June 30, 1966 amounted to the equivalent of $1,687 million. However, after deducting the cumulative total of IDA commitments for the period ($1,365 million), the uncommitted resources of the IDA as of June 30, 1966, amounted to $322 million. In view of the continuing need for development assistance on concessional terms by the economically poorer countries, due in part to

the sharp rise in service payments on previously contracted debt, the President of the IDA, after the close of the period under review, proposed a further substantial replenishment of IDA's resources through the provision of supplementary contributions by the Part I countries."2

2 See footnote 75 to doc. II-68, infra.

IDA DEVELOPMENT CREDITS AND

DISBURSEMENTS

The IDA in fiscal 1966 approved 12 credits totaling $284 million, over 87 percent of which was authorized to finance industrial imports, transportation projects, power and irrigation, grain storage facilities, and education in Asia. The remaining credits, totaling $36 million, will assist in expanding educational facilities and in financing agricultural credit, transportation projects and water supplies in Africa, in addition to a livestock project in Paraguay (see table 11). As indicated in table 12, through the end of the period under review, the IDA authorized 89 development credits totaling $1.4 billion in 32 countries in Asia and the Middle East ($1,046.4 million), Africa ($145.1 million), the Western Hemisphere ($107.9 million), and Europe ($65.7 million) for purposes generally similar to those of International Bank loans. Approximately $536 million was authorized for transportation, $247.5 million for agriculture and forestry, $246.4 million for industry, $119.7 million for power projects, $75 million for telecommunications, and $140.9 million for water supplies and educational projects.

CONCLUSIONS AND RECOMMENDATIONS

It is the view of the National Advisory Council that the International Development Association, during the period under review, has performed a useful and important service in providing long-term capital to its lessdeveloped member countries on terms which are less burdensome than those of conventional financing. During the 5 years of its operation, the Association has provided funds in excess of $1 billion to assist in financing carefully selected, high priority projects, chiefly in the areas of transportation, agriculture, and industry, which are intended to raise the economic level of the de