mated that over half of this debt is held outside the United States. In the first half of 1960, the Bank sold the equivalent of $159.7 million principal amount of loans, all without its guarantee. Through June 30, 1960, the cumulative total of sales and agreements for sales of portions of Bank loans amounted to the equivalent of $811 million. The Council gave the consent of the United States to the Bank's borrowing operations in U.S. currency, and authorized the Bank to sell portions of its loans in the U.S. investment market. FISCAL RESULTS In the fiscal year ended June 30, 1960, the Bank reported a record net income of $59.5 million, as compared to $46.5 million earned in the preceding fiscal year. This income was placed in the Supplemental Reserve, thereby increasing that Reserve to $341.6 million. Loan commissions of $27 million, an increase of $3 million over the previous year, were credited to the Special Reserve, which totaled $164.8 million on June 30. Principal repayments received by the Bank during the fiscal year amounted to $73.7 million, as against $45.2 million in the previous period, and borrowers repaid $84.4 million on portions of their loans held by other investors. Total repayments on Bank loans aggregated $659 million by June 30, and consisted of $338 million repaid to the Bank and $321 million repaid to the purchasers of borrowers' obligations sold by the Bank. 49. OPERATIONS OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DURING THE PERIOD JULY 1-DECEMBER 31, 1960: Report of the National Advisory Council on International Monetary and Financial Problems, Submitted September 13, 1961 (Excerpt) 10 FIFTEENTH ANNUAL MEETING OF THE INTERNATIONAL BANK The Board of Governors of the International Bank held its Fifteenth Annual Meeting jointly with the Annual Meetings of the International Monetary Fund and the International Finance Corporation. In the absence of President Eugene R. Black, the Vice President of the Bank, W. A. B. Iliff, presented the Bank's Annual Report 11 to the joint session of the Boards of Governors. He reviewed the progress achieved by the Bank in the relatively short period of its existence in terms of increased membership, increased Bank lending, and in terms of the shift from a dollar Bank to a truly international institution. He indicated that, exclusive of the U.S. subscription, members' paid-in capital available for lending totaled in excess of $1 billion and that of the Bank's outstanding funded debt of over $2 1o H. Doc. 241, 87th Cong., Sept. 14, 1961, pp. 8-13. Part III of the NAC report. " IBRD, Fifteenth Annual Report, 1959-1960. billion, more than one-half was held outside the United States. Investors in more than 40 countries were holders of the Bank's securities, and there had been increasing interest also in purchases of portions of Bank loans, without the Bank's guarantee, by investors outside the United States. The Vice President at the same time referred to new types of problems with which the Bank will soon be confronted-problems relating to those countries which have but recently attained their independence and are potential members of the Bank, and the problems of those countries whose ability to finance their development requirements on conventional terms is limited in comparison with the funds which these countries could effectively use. In this context, the Vice President welcomed the establishment of the International Development Association as an affiliate of the Bank and expressed confidence that the Bank, together with the Association, would be able to assist less-developed member countries more effectively and on a wider front than the Bank had previously been able to do alone. At the discussion of the Bank's Annual Report, Douglas Dillon, U.S. Alternate Governor, paid tribute to the leadership of President Black in creating a greater awareness of the importance of assisting the newly developing areas in their efforts to achieve economic and social progress under conditions of individual freedom and national independence.12 He commented upon the increasing trend toward multilateral cooperation for economic development, referring specifically to the conclusion of the agreement on the Indus Basin Settlement Plan,13 which should make an important contribution to the economic potential of India and Pakistan, the recently established International Development Association 1 and Inter-American Development Bank,15 and the establishment of a Development Assistance Group among several capital-exporting countries. He cautioned, however, that bilateral programs of long-term assistance were also essential, especially on the part of those industrialized countries which have been generating large balance-of-payments surpluses. The Board of Governors reviewed the financial statements and audit report for the 1960 fiscal year, and the administrative budget for the fiscal year ending June 30, 1961, and allocated the net income of the Bank to the Supplemental Reserve against losses on loans and guarantees made by the Bank. As required by Section 4(b) of Article V of its Articles of Agreement, the Bank conducted the eighth regular election of Executive Directors. The Board also approved the membership applications of Nepal and Nigeria to the Bank, under the usual terms and conditions, with subscriptions of $10 million and $66.7 million, respectively, and authorized an increase from $80 12 17 13 For the text of Mr. Dillon's statement made Sept. 27, 1960, see the Department of State Bulletin, Oct. 17, 1960, pp. 608-611. 13 See post, doc. 214. 14 See post, doc. 50. 15 See post, docs. 126 and 127. 16 See post, docs. 135 and 136. "Text in A Decade of American Foreign Policy: Basic Documents, 1941-1949, pp. 251-273. million to $106.7 million in the subscription of Yugoslavia to the capital stock of the Bank. At the closing joint session, the Governor for Thailand was elected Chairman, and the Governor for India was elected Vice Chairman of the Boards of Governors for the coming year. It was agreed to convene the Sixteenth Annual Meeting of the Board of Governors in Vienna, Austria, during September 1961, jointly with the Meetings of the International Monetary Fund and the International Finance Corporation. MEMBERSHIP AND SUBSCRIPTIONS There were no additions to the membership of the Bank in the period under review.18 In this period, however, 2 countries-Cuba and the Dominican Republic-withdrew from membership in the Bank, thereby reducing the number of member countries on December 31, 1960, to 66. As of this date, increases in member countries' subscriptions, pursuant, among others, to Resolutions 128, 130, and 132 of the Board of Governors, brought the total subscribed capital stock of the Bank to $19,902.2 million. (See appendix table Ĉ–1.) COMMITMENTS AND DISBURSEMENTS As shown in table 4,19 total loan commitments in the second half of 1960 amounted to the equivalent of $292.4 million 20 in 10 member countries, an amount slightly less than the $310 million authorized during the preceding semiannual period and the $349 million committed in the last half of 1959. The bulk of these funds over 75 percent was approved for development projects in four countries in Asia and the Middle East-Pakistan, India, Israel, and Japan. A loan of $90 million to the Government of Pakistan for the Indus Basin development project was approved by the Bank upon settlement of the long-standing dispute between India and Pakistan with respect to the division of water resources of the Indus system of rivers. The Bank played an important role in the successful mediation of this problem. Under an international financial agreement executed by representatives of the Bank and of the Governments of Australia, Canada, Germany, New Zealand, Pakistan, the United Kingdom, and the United States, an Indus Basin Development Fund in the equivalent of about $1 billion 21 was established to finance the construction of irrigation and other works in Pakistan. This fund will be administered by the International Bank. Of two loans totaling $90 million for India, one of $70 million to the Government of India will assist in financing the improvement and 18 In March 1961, Portugal and the Federation of Nigeria became members of the Bank with capital subscriptions of $80 million and $66.7 million, respectively. [Footnote in source text.] 19 Not reprinted here. 20 Net loan commitments in this period were $284.4 million. [Footnote in source text.] 21 Including a loan of $70 million by the U.S. Development Loan Fund and a U.S. Government grant contribution of $177 million. [Footnote in source text.] expansion of the Indian Railways. The other loan of $20 million to the Industrial Credit and Investment Corporation of India (ICICI) will be used to meet the foreign exchange requirements of this privately owned and managed development bank over the next 2 years. Additional Bank financing in this geographical area included a $27.5 million loan to Israel-the Bank's first loan in that country-for port construction and development, and two joint transactions in which the Bank provided a total of $13 million for two Japanese steel companies, and these companies simultaneously borrowed a total of $9.8 million in the U.S. investment market, the proceeds to be used to assist in financing an expansion of steel production. In Latin America, loans totaling $47 million ranged in amount from $3.8 million for electric power development in El Salvador to $25 million for road construction and improvement in Mexico. A $25 million loan was also approved to finance the expansion of electric power in Norway. Loan disbursements during the period were $180 million. Through December 31, 1960, the Bank has assisted in financing 277 loans in 54 countries or territories in the equivalent of $5.4 billion.22 (See table 5.) Geographically, the largest increase over the past 2 years occurred in countries in Asia and the Middle East ($588 million). Loan disbursements were in excess of $4 billion, compared to $3.1 billion at the end of 1958. Of total loan disbursements, over one-half was provided by private investors, with the larger portion of this investment from sources outside the United States. "Net of cancellations, terminations, and refundings. [Footnote in source text.] |