TABLE B-1.-Membership and quotas in the International Monetary Fund (IMF), and memberships and subscriptions in the International Bank (IBRD), and the International Finance Corporation (IFC), as of Dec. 31, 1964-Continued

Source: International Monetary Fund, International Bank and International Finance Corporation.

THE INTERNATIONAL DEVELOPMENT ASSOCIATION

Document II-48

Support for Legislation To Increase the Resources of the International Development Association: STATEMENT MADE BY THE SECRETARY OF STATE (RUSK) AT A NEWS CONFERENCE, FEBRUARY 27, 1964 18

I should like to comment briefly on the action by the House of Representatives yesterday on the bill to authorize the United States participation in increasing the resources of the International Development Association, generally known as IDA. The House action was not a final parliamentary vote on the bill itself but a recommitment to the Banking and Currency Committee.19

I feel that it is imperative that the bill be returned to the floor of the House and acted upon favorably.

The United States has always been the moving force in IDA. Heretofore IDA has received strong support from the Congress. One of the points on which congressional sentiment has been emphatic is that the United States should not carry the total burden of helping the less developed countries improve their standards of living. In IDA the principle of burden sharing is given full effect. For each dollar that the United States would put up, the other industrial countries would contribute $1.40 of their own funds.

IDA, as you know, is managed and directed by the officers and staff of the World Bank, who enjoy universal respect. Its affairs have been conducted from the beginning in the most efficient and effective manner. The program to increase IDA resources has been a suitable and a notable cooperative endeavor. For the United States now to drop out of the common effort would produce disillusionment in many quarters of the free world. I am sure that the Congress on reflection will not wish to be a party to such an abdication of leadership on our part.

18

Department of State Bulletin, Mar. 16, 1964, p. 403.

19 The House of Representatives had voted (208-188) to return to committee this bill, which authorized the U.S. Governors of IDA to vote for a proposed $750 million increase in the resources of the Association, of which the U.S. share, $312 million, was to be provided over a 3-year period. In May the bill was again reported out of committee, a motion to recommit it was voted down (132-247), and the bill, which had already passed the Senate, was adopted in the House by a voice vote (Public Law 88-310; 78 Stat. 200). The text of a statement by President Johnson on the occasion of signing the bill, May 26, is printed in the Department of State Bulletin, June 15, 1964, pp. 935-936.

Document II-49

Operations of the International Development Association During the Period January 1-June 30, 1964: REPORT OF THE NATIONAL ADVISORY COUNCIL ON INTERNATIONAL MONETARY AND FINANCIAL PROBLEMS, SUBMITTED JANUARY 29, 1965 (EXCERPT) 20

IV. INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)

Established in 1960 by member governments of the International Bank,21 the IDA, under its Articles of Agreement, is authorized to extend development credits on terms which bear less heavily on the balance of payments of recipient member countries than those of conventional loans. The IDA is financially separate from the Bank, although otherwise it is completely integrated with it. Since IDA lends on concessionary terms, it is almost entirely dependent upon its membership for additional funds. In the current half-year period, new credit authorizations increased to $201 million from $82 million in the preceding 6-month period.

A plan for the replenishment of IDA resources in the amount of $750 million became effective on June 29, 1964, with the formal notification to IDA by 12 governments that they would contribute new funds to the Association totaling over $600 million. Details are reported below.

MEMBERSHIP AND RESOURCES

In the first half of 1964, three additional countries accepted membership in the IDA-Cameroon, Kenya, and Luxembourg-with initial subscriptions of $1,010,000, $1,680,000, and $375,000, respectively. As of June 30, 1964, the Association had 93 members-17 Part I and 76 Part II countries-with total initial subscriptions of $987.4 million, of which $767.5 million was in convertible form and may be freely used for lending purposes. (See table 8.) 22

Under its Article of Agreement, the IDA is required to keep the adequacy of its resources under regular review, with the first review to take place within the first 5 years of operation. General or individual increases in subscription may be authorized at any time.

As the result of a request by the Board of Governors to consider the prospective requirements of the Association, the Executive Directors in September 1963 reported to the Governors that on the basis of projects under active consideration, the uncommitted balance of IDA's initial resources in freely usable currencies would in all probability not permit new commitments at the desirable rate.23 The Executive Directors concluded that the Association needed additional resources to enable it to continue operations and noted that the 15 Part I, or

*H. Doc. 70, 89th Cong., Feb. 2, 1965, pp. 15–19. Part IV of the NAC report. See American Foreign Policy: Current Documents, 1960, pp. 140-141. "Not printed here, but see table 11 to doc. II-50, infra.

23 See American Foreign Policy: Current Documents, 1963, pp. 191-192.

24

economically advanced countries, together with Belgium and Luxem-. bourg, which had applied for membership, were prepared, subject to necessary legislative action, to make available to the Association the equivalent of $750 million in freely usable funds. Payment would be made in three annual installments of $250 million each, the first installment to be due in November 1965. This schedule compares with aggregate payments on their initial subscriptions by these governments (exclusive of Belgium and Luxembourg) of approximately $150 million a year during the 5 years 1960-64. The obligation to contribute new funds would not become binding on any member unless 12 of the prospective contributing members, with total contributions of at least $600 million, gave formal notifications to the IDA by June 30, 1964, that they would contribute the amounts proposed for each of them. Among the larger contributors, the United States agreed to provide $312 million, the United Kingdom $96.6 million, Germany $72.6 million, and France $61.9 million.

The proposed increase in IDA resources became effective on June 29, 1964, after formal notifications by 12 member countries-Australia, Austria, Denmark, France, Germany, Italy, Japan, Luxembourg, Norway, Sweden, the United Kingdom, and the United States-that they would contribute new resources to the IDA in the equivalent of $668,637,000. (Legislation authorizing U.S. participation in the proposed increase was signed by the President on May 26, 1964 (Public Law 88-310).) 25 These countries and their respective contributions, as of June 30, 1964, are shown in column 4 of table 8.

Belgium notified the IDA on July 2, 1964, of its agreement to participate with a contribution of $16.5 million. With respect to the contributions of Belgium and Luxembourg, one-half would be considered as initial subscriptions with voting rights and the balance as additional contributions. In addition, in July 1964 the Government of Kuwait participated in the replenishment with a contribution of $3,360,000.26

As indicated in table 8, total initial and supplementary resources of the IDA on June 30, 1964, aggregated the equivalent of approximately $1.7 billion, including paid-in supplementary contributions of $10,090,000 by Sweden.

The Swedish Parliament in May approved a special supplementary contribution of $5,045,000 to the resources of the IDA-its third contribution of this type-as part of its development aid effort. Payment of this amount to the Association was made in July 1964. The total of such special contributions by Sweden was thereby increased to $15,135,000.

To provide additional resources to the IDA, the Executive Directors of the IBRD, after the close of the period under review, recommended,

24 Luxembourg accepted membership in the current period. [Footnote in source text.]

See footnote 19 to doc. II-48, supra.

"As of December 1964, 16 of the 18 contributing countries had notified the Association of their contributions of $747 million toward the replenishment of IDA's resources. [Footnote in source text.]

and the Governors approved, a transfer of $50 million from the Bank's fiscal 1964 net income as a grant to the IDA.

IDA DEVELOPMENT CREDITS AND DISBURSEMENTS

In the 6-month period under review, the IDA authorized credits totaling $201 million-an amount larger than that approved in any prior 6-month period-to stimulate economic growth in five member countries: Ecuador, India, Niger, Pakistan, and Tanganyika (see table 9).27 Almost one-half of the total was extended for the improvement and expansion of transportation facilities in Ecuador, Niger, Pakistan, and Tanganyika ($98 million). A $90 million credit to India-the first credit of this type authorized by the IDA-is intended to assist in financing imports of industrial materials and components required to expand the production of selected capital goods of major importance to India's economic development. Additional authorizations included two credits totaling $13 million for educational projects in Pakistan. The $8 million credit to Ecuador, to assist in financing a 5-year national highway program, was supplemented by additional funds totaling the equivalent of $31 million by the International Bank, the Agency for International Development, and the Inter-American Development Bank.

In fiscal 1964, the IDA approved 18 credits totaling the equivalent of $283 million, an increase of $23 million over the preceding fiscal period, and $124 million was disbursed. This compares with credit authorizations of $134 million in fiscal 1962-IDA's first full year of operations.

As indicated in table 10,28 through the end of the period under review, the IDA had extended 57 credits amounting to $778.2 million for economic development in 22 member countries. Over three-fourths of the total ($593 million) was authorized for the development and expansion of transportation facilities; irrigation, land improvement, flood control and other projects designed to increase the output of food and other agricultural products; and for the development of industry. Total disbursements through June 30, 1964, were $192.5 million, or about 25 percent of net credits authorized.

The U.S. Executive Director of the International Development Association, or his Alternate, acting on the advice of the Council, supported the decisions taken with respect to the foregoing matters.

27 Not printed here.

23 Not printed here, but see table 10 to doc. II-50, infra.