STRICTLY ONFIDENTIAL INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TWO HUNDRED AND TWENTY-FIFTH REGULAR MEETING Of EXECUTIVE DIRECTORS Board Room International Bank Bu1ld1 Washington, D. c. Thursday, December 6, 1951 The meeting was convened at 10:10 a.rn., Mr. Eugene R. Black, President, presiding. 2 STRICTLY ONFIDENTIAL STRICTLY ONFIDENTIAL " 30 THE CHAIRMAN: I don't think there is any big hurry abou it. We cannot do it until we get the approval of the French Government, a:ryway. Now I would like to ask Mr. Sommers to tell the Board and bring the Board up to date on our discussions and studies on the creation or the International Finance Corpora tion. We have been asked by several directors as to just where that stands. MR. SOMMERS: There have been two principal parts to what we have been doing in the staff on the request by the Economic and Social Council that the Bank make a report as to what functions such an institution could perform usefully that have not been or are not being performed by existing institutions. In the first place, we have had discussions as to the outline of a report that we have organized in the staff in a small working party consisting of representatives of the interested departments, and a draft or something of an elaborated outline is in the process of being worked out and it 1s expected to reach its first stage at the end of this week or the beginning of next week. At the same time, various members of the staff have held, on a very informal basis, discussions with bankers and other private businessmen interested in the field of foreign 31 STRICTLY ONFIDENTIAL investment, both in this country and in Western Europe, on this subject, not from the point of view of how such an organization might -be organized or as to the policy impli- cations from the point of view of the Bank, ~ut rather to see whether, in as rough a way as is possible in that kind of conversation, we could get any impression as to the interest that private investors might have in the types of operations envisaged in the proposal -- namely, a Joint venture between this . International Finance Corporation as originally proposed in the Rockefeller Report and private investors in particular development projects under the auspices of private corporations with the participation of private investors being in the form of an eqll:ity, the participation of the proposed International Finance Corpora tion being either in the form of equity capital or loan capital without a government guarantee or perhaps some com- bination of both. We have not gone very far with those discussions yet. We have been trying to keep them on a very informal basis. I would say that although there is nothing :B.ke unanimity in the replies that we have received or the comments we have had, there is at least a good deal of interest on behalf of various bankers and industrialists, both in this country and in Europe, in such a corporation, an there are a good number of people who say that there would 32 STRICTLY ONFIDENTIAL be a demand from private businesses and private investors for the kind of operation envisaged in the original dis- cussion. The one subject, I think, on which there was complete unanimity among all the people we have talked to was that if any such finance corporation is to be established affiliat d in any way with the Bank, there should not be any access by that corporation to Bank funds, to normal Bank fends. In other words, the Bank's lending operations or borrowing operations should not be a mode of siphoning marketable investors' funds into this new enterprise. That seemed to be a quite universal opinion. At the present time, Mr. Crena de Iongh is in Western Europe and is talking along the same lines to bankers and '· various industrialists with foreign interests on this subject We have not heard anything of his impressions yet. I would say the time schedule on the thing is something along the following lines. The last word we have is that the ECOSOC meeting will probably be in April. We are trying to have a draft paper for discussion by the management of the Bank during this month, and that is about as far as· we have gone in our thinking of timing. MR. BEYEN: Mr. Chairman, this is undoubtedly a very interesting and important subject for the Bank and it is a good thing that we got to know something in the Board abou 33 STRICTLY ONFIDENTIAL • hat has been done so :tar. I trust that before the actual . report go~s out the members of the Board will have occasion t o discuss the subject. I must admit that, not being able to benefit from any o f the investigations that have taken place so far, I am s till rather doubtful on the subject and I would like to a sk one thing. So far I get the impression that all the investigations )lave gone in the direction of those who would be interested from the side of providing the money. What I am doubtful about is not theoretically but practically that sufficient ·amounts of projects could be found in the under-developed countries which would really ask for this type of financing. I can well see that there is a great deal of financing t hat has to be done by equity in the way o~ mining or ·p lantations and all that which, to my mind, should all be ,. outside the field of this corporation. I have asked myself 'What other field there would be outside the field of the original development which t~world has known ever since a nd which is very suitable for that sort of financing -- what we would call self-liquidating investment and that aort of thing. I have asked myself what sort of other development p ·r ojects the need for equity capital could arise which ·could be suitably provided by this sort of international ,t 34 STRICTLY ONFIDENTIAL institution rather than by the form of industrial development banks financed with money of the Bank in the country. And I myse+f haven't any idea whether there is much of that. I mean I am quite sure that you will find rome cases, but is there much of that and what particular type of projects would that include. Mr. Melville told me in his opinion there are quite a number of cases where it might be useful. Now, I would have thought that the Bank, having had missions nearly all over the world by now, would have itself a very excellent source of giving an answer to this question, because if a need of that kind of financing was present in the field of development we are after, it would have present d itself to the eyes of the missions, especially the general missions we have been sending abroad. Therefore, it would be useful to investigate what people who would like to enter this field from the active side are thinking about an enterprise like that. You really cannot get the answer before you know the other side and if there is really a demand for that. I would like to ask you whether the staff, on the basis of its own experience in cormection with the missions sent around the world, could give some sort of an answer to that -- how great the need is, what type of need and what type of enterprises are involved. STRICTLY ONFIDENTIAL 35 THE CHAIRMAN: Well, you are emphasizing the equity side of this. I think there would be occasions where ttlat would be valuable. But I personally have always felt that this International Finance Corporation would be more valuable because of its ability to make loans without a government g.tarantee. I have always felt that was the more important side or· it m.ther than the equity. There is a disagreement among some of us about that. But I personally have run into a number of cases where we could make loans without a government guarantee that would be perfectly good loans where the people ~ould not take them with a government, guarantee. But as I say, I think there is a difference of opinion on that. The equity thing might be more important than that part of it. MR. BEYEN: What you say concerns my own thoughts on the subject. MR. GARNER: I would .like to say this. I think we have seen a number of cases, and that is one of the things we have not pulled together yet. That will be one of the processes of our own interior investigation and checking, either for equity or loans. And I think there are two kinds. One is where the project appears in the country and the local people want to do it and they need some additional capital.. There is a totally different kind of thing where we know of American, British, French or other companies that 36 STRICTLY ONFIDENTIAL have found some in~eresting opportunities to establish a factory or something or that sort down in some other country, are willing to put up a certain amount .of capital, but do not want to put up the full amount of capital. Now, the fact that more of those things have not come to us as concrete proposals, I think, is due to the fact that in part, they realize under present circumstances they have to get a government guarantee and they don't even want to explore the possibilities if a government guarantee is involved. But I believe that when we do put our heads together and take it country by country and talk to these people, we will, I think, find a number of instances where interest would be developed if we were in a position to talk about either a loan or an equity investment without government intervention. making As for the question between ma.king loans and _ equity investments, I am inclined to think that most of the people would rather approach us on a loan basis. It is quite a profitable enterprise if you can put in a small amount of capital and get somebody to lend a larger amount of capital at a loan rate. All I would want to say on the desirabil1 ty of that 1s that I believe any institution doing this sort of operatio should have a certain number of equity investments in which ( STRICTLY ONFIDENTIAL 37 · they have an opportunity to make more than a loan rate and thus compensate for what is obviously the greater danger and the greater risk in this sort of an enterprise than in our present type of financing. I am not prepared to say that I think the majority would be either loan capital or equity capital. But I think there would be a demand tor both and that the corpora- tion, to be successful, would need to have a mixture. MR. BEYEN: Mr. Chairman, can Mr. Garner give me any idea of what type of enterprise he is thinking of. MR. GARNER: Well, when I was in Colombia the question was raised about the expansion of the sugar industry down there. Now, they have exceedingly favorable conditions for growing sugar in Colombia and they are doing it successfully. One of the great handicaps up to now has been transportation. s t year they shipped some sugar out by airplane. La. With the possibilities of increased transportation facilities in Colombia, with a road program and the prospects of improvement of railroad transportation, that would probably be pretty well solved and the Colombians, looking forward to that, are very much interested in the question of a sugar refinery. They are willing to put up some capital, the local part of the capital. They would like to have some foreign exchange capital come in. Now, as one example I think on the surface that looks STRICTLY ONFIDENTIAL 38 like a very good enterprise. Perhaps if you wait that long you could not only get the local capital put up privately, but you might very well interest some foreign sugar people to put up part of it. There are various other manufacturing enterprises in Colombia, some local and some from other countries going down there, that might join in if there was some additional capital available. I speak of that country because it is the last La.tin American country, under-developed country, that I have been in. I think one could find other similar cases in other countries where our missions have visited. MR. SOMMERS: In answer to Mr. Beyen•s question, I think that most of us on the staff feel that it will be mostly in the industrial or manufacturing field • MR. BEYEN: . Not in the public utility field. MR. SOMMERS: One of the difficulties in this thing is trying, without laying down any hard and fast rule, to tee in your own mind .where this kind of an enterprise fits in between the Bank's regular operations on the one hand and 1he kind of thing that we were talking about in connection with the Turkish Industrial Bank on the other hand. I mean if the finance corporation is to be largely a lending opera- tion, how do you draw the line between that type of loan without government guarantee and ~he Mexican Consortium or Turkish Industrial Bank technique which gives the Bank .. STRICTLY ONFIDENTIAL 39 a government guarantee. MR. BEYEN: I see two dangers, Mr. Chairman. Mind 7ou, I am not saying that this is not a very good idea. But I see first the danger that you have a theoretical .. need that in practice will not show to be large enough to be dealt with by an institution which unfortWlately will create a lot or publicity. And I am thinking of the experien e before this last war in the European countries with the questio·n of medium-term credit to small industries. In all these coWltries there was the theoretical need for that. Many coWltriea set up institutions for ' that, and up Wltil the time the war came -- I mean the need appeared to be so small 't hat it could hardly pay the salary of the doorman of the institution. The other danger I see is that you have you would have such a great variety of private enteJi)rise asking for a lot of very specialized knowledge that you would really not be too capable of dealing with it. I can think ·or a number of cases from my own experience. I can think :or a large sugar plantation in Indonesia -- I can think · of Lever. Brothers. Now, in the public utility field we might try to hire ·someone to help us. But if we get into such a diversificatio of industries, it might be a great problem, and purely a problem from the point of view of hwnan management. STRICTLY ONFIDENTIAL 40 We talked to many people in that field. They all come up against the problem nowadays, partly because of difficulties with local legislation and taxation, partly because of the fear of transfer difficulties, and they say "Well, we would set up a glycerine factory in Brazil or Chile, but we think the risk is too great." Those cases are c~rtainly there. If we would say to them "Listen, we are willing to give you a loan that would need the guarantee of the government, 11 they would say "Oh, no, that is the last thing we want because we don't want interference. All right, if you go away from that you still have the trouble that these people don•t like too much interference of anybody anyway. I am just thinking aloud abOl t the sort of difficulties we might get up against. I would think in considering the whole thing we should very much keep in mind in which cases we could operate with the local industrial development banks and change rather the structure of these local institutions and enable them eventually to participate. But I am Just in the early stages of thinking about it. Well, Mr. Chairman, I just wanted to utter a few thoughts I had on this matter. MR. GARNER: May I say something on this fl.rat part. I think it would be a totally impractical thing if this STRICTLY ONFIDENTIAL 41 Bank tried to set up a management comparable to Lever Brothers. I think our concept is more of the type or an investment trust which only makes investments when they find a partner that knows how to run it and that they investigate but they don't attempt to manage. I think it would be an impractical operation for us or anybody to think that they could set up, short of years and years ot experience -- and probably then they would have to confine it to certain general fields -- an operating manage- ment. On the otherhand, investment trusts of various · sorts have found it is practical to find enterprises where the management is satisfactory and take a participation in them. And I think that is one ot the basic things that meets the management problem. You do, I think, then contemplate a minority interest and you have to have considerable confi- dence in the partner that is going to manage·, and I think that is really one of the keys to successful operation. You have got to only deal with people where you have the cont1- dence that they can supply trustworthy and competent manage- ment. MR. BEYEN: You should be careful not to get into the old story ot the partner who had the experience and the partner who had the money and they ended up that the first had the money and the latter then had the experienee. STRICTLY ONFIDENTIAL 42 MR. HEURTEMATTE: Wouldn't it be necessary 1n all cases to make some arrangement with the governments? What I mean is this. Whether the loan is an equity or capital loan, whether it is for the expansion of present facilities or for the creation of new industries, what guarantee is the investor going to have about future legislation, about future taxes. When you have the guarantee of the government, all those difficulties are eliminated. THE CHAIRMAN: Well., that is something we would have to be very careful about in making the loan where you didn't have the government guarantee. But I can assure you that I know of a number of cases where private concerns., industrial concerns, the kind that Mr. Beyen was talking about, would not go into a eountry where they would have to have a government guarantee. They wouldn't take it. Now, it is perfe,tly true that if we had a separate company and that company ~as able to make loans without government guarantee, you have got to take all these things into consideration that you are talking about. You have got to take them 1n doubly more than we would with a government guarantee. MR. WOLFSON: I would like to say, Mr. Chairman, that this whole concept, as far as I know., emanates from the concern that has been felt in ECOSOC and the UN Organization with regard to the development of under-developed 43 STRICTLY ONFIDENTIAL countries. And because of that, the features that have been mentioned here lead me to believe that perhaps the most fruitful avenue of exploration might well be in the furtherance of these development banks in the territories in which we are interest and having the Bank, our Bank as such, one stage further removed. In such an event, not only do we get a more detailed knowledge of the circumstances of the country involved, not only is there a possibility for the development bank to get certain guarantees and assurances from the government without exposing the actual enterprise to fall into that relationship vis-a-vis the government, but we have an additional feature which has been markedly lacking in the development ot under-developed countries, namely, the inability of these countries to mobilize domestic finance or any sort in any worth-while degree tor launching these enterprises. One or the features that has been noted 1n the dis- cussions or the development of under-developed countries has been the propensity on the part of domestic capitalists to invest either 1n real estate, in gold, in foreign exchange or in some other foreign asset, anything but an asset in the country. And it is not surprising that they are reluctant to take on a position on bonds where the belief is that the inflationary position in those countries will undermine the stability ot those bonds. STRICTLY ONFIDENTIAL 44 It has therefore occurred to me at one stage or the discussions ot these UN organizations, tentatively, the idea that these development banks might well have within their capital structure an equity portion so that people within the country could, by investing in local currencies in that equity holding in the development bank, beceme a partner in a real asset in an industrial field in which he knows that there is a certain amount of management talent and where he has the sense of reliability because the development bank is in turn tied up with an institution like the I.B.R.D. If that were possible, then I would have thought that we ·in the I.B.R.D. might well tend to t~cus, though not exclusively- yet centrally, our attentions on the development ot these development banks which would have, as I aay, in their structure the possibility for equity participation by others in the countries in which they are located. And if we do that, I think that we might well overcome some ot the misgivings that we have, namely, the initiative tor the enterprises will be found within the territories. We · will not have to exercise so careful a 1crutiny about the assurance ot the management because we will also have partners who will be in a position to Judge the ability of the management of the enterprise to function in the ~erritory in which this new development is to take place. 45 STRICTLY ONFIDENTIAL I would like to leave that point and I would like to ask just for my information another point -- namely, where do we contemplate the capital to eome from that we will invest in this corporation. I am sorry 1f it is in my ignorance that I am forcing open doors, but apparently in the discussion that took place Mr. Beyen was concerned rather about who iB going to take the money. And I was wondering tor the moment, where is the money going to eome from? Is it going to be a competitor to the funds that we are going to try to raise in the existing markets tor the type or program which we already have? THE CHAIRMAN: Well, I ean set you straight on that. ~he money, if there is such a corporation, will have to come from appropriations from governments. MR. WOLFSON: What we will be is managers of funds provided by governments and it will in no way compete with our markets or our sources for other types or funds. ,-HE CHAIRMAN: There is no way we can compete. MR. WOLFSON: All right -- good enough. MR. SELEK: On the government guarantee questbn, I think there 1s a difference. One was about the transfer and the other is the payment. Aetually we are trying to get not only the one but two or them. The guarantee we ask is also the repayment guarantee which would not be existing in this case. But I think 1n any case we will have STRICTLY ONFIDENTIAL 46 to get transfer guarantees or · facilities for providing the necessary exchange. THE CHAIRMAN: That would depend on where we do it. MR. SELEK: In the activities of an organization of that kind, the guarantee which wouldn't be required, in my opinion, would ~e the one or the repayment guarantee from the governments -- but not the transfer. In no place where there is no transfer security no money can go into . that country. There must be one way or securing the lender that he will have his money back when the time comes. But the government will not be responsible for the solvency of that borrower as is the case when it comes from this 2ank. MR. SOMMERS: In answer to that and what Mr. Heurtematte said, there is nothing in this suggestion that was originally made by Mr. Rockefeller that would preclude any individual investing enterprise from making arrangements as to foreign ·e xchange, as t;o withdrawal or profits or anything ot that kind. It would not be contemplated that any such arrange- ments would have to take tteform of a guarantee of a credit by the government and having the government's credit un- reservedly behind it. MR. SHEHOY: I have not looked into this topic, but I would like to have an idea of the nature of the relat1on- ·sh1p contemplated between the corporation and the Bank. Some ·r ef erence was made to it. STRICTLY ONFIDENTIAL THE CHAIRMAN: Well, there haven't been any papers on this. As a matter ot tact, I am going to ask that the working papers be sent to the directors -- the working papers we have so far. We will send that to the Board right away. MR. SOMMERS: May I make a statement. MR. SHENOY: The nature of the relationship contemplated between the corporation and the Bank in the financial field. MR. SOMMERS: The background ot this is a very short passage in the report or the committee headed by Mr. Nelson Rockefeller to the President. It 1s about half a page in which he suggested that an International ~inance Corporation affiliated with the International Bank be established to make un-guaranteed loans and equity investments in private enterprises. He contemplated that the member governments of the Bank would supply the capital or this new institution by stock subscriptions of one kind or another with the voting · stock, I think he said, held by the International Bank in return for a very nominal subscription. Now, we have a paper that was worked up purely for purposes or illustrating problems, expanding that very brief hypothetical outline more fully, and I think that might be useful as a basis for raising questions. The paper does not at all attempt to answer any of the questions. STRICTLY ONFIDENTIAL 48 We could circulate that. It is quite a brief thing. And that would, I think, answer this question. MR. BEYEN: Mr. Chairman, I don't want to be dis- couraging, but I would like to draw your attention to one feature which might prove difficult 1n this respect. It may be that I am looking at it from a too pessimistic angle because my experience has been mostly with the Dutch people and the Dutch people are known to think that they are the only ones who know anything about the things they do. We have a word about 1t which cannot be translated in any other language, so I won't even mention it here. My experience with the big companies is that although - naturally they know a great deal more than other people, in their own mind they are the only ·people that know anything about it at all. They very grudgingly admit that their competi~ors might know something about it. But even then they may not go so far as the brother of Sir Stafford Cripps 1n sh1pp1ng who when asked how his competitors in shipping were said "I can't call them competitors because I am the only one who knows anything about 1t, but they come very near to it." I always found it a great difficulty to get it into these people ' s minds to get into any sort ot partnership because they were accustomed through the years Just to go there and have their own way. · STRICTLY ONFIDENTIAL 49 Even a minorit1 interest is something which is extremely unpalatable to them. It 1s one of the things which we might have to overcome in dealing with them. You will find a lot of stories about it regarding trade secrets and all that, but that is not the real cause. The real cause 1s psychological. The real cause is that they think there is nobody el.se in the world who lmows anything about it. MR. BURY: Mr. Chairman, since you suggest that the money might have to be round by governments, I hesitate to open my mouth too wide, but I think the gap Mr. Melville was thinking or is the gap between what private industry in the most developed countries could do to exploit oppor- ~unities in the various under-developed countries and what it 1s doing. In the case or Australia, being a small country but still not quite so burdened with these psychological factors which have been referred to, we have been particularly successful 1n biscuits, bottles and breweries. There are throughout South Asia and Southeast Asia a nwnber of small .tirms, very often very· small scale, that are undertaking enterprises which, with the aid of foreign know-how, could be expanded enormously. An example 1s the bottle industry which one of the Australian firms started off with not J~ry long ago in Malaya. In Malaya there were a number of 50 STRICTLY ONFIDENTIAL glass-blowing concerns of the cottage type. There was a potential demand there, but no foreign firm took any in- terest 1n it. There was no way by which these potentialities were even brought to the notice or the other firms. At least one possible function or an institution or this sort is to Just bring to the attention of the United States, Europe and other countries the potentialities which do exist. And there are in the under-developed countries many foundations which ar~ not exploited. MR. HOPPENOT: Mr. Chairman, it is quite obvious that governments prefer giving their guarantee for public works, electricity, dams, things ot a general utility and political significance and prestige value. In fact, that 1s the kind of business up to date to a large extent we have had. We have entered the field or. small and more private industry through these investment banks, and that is a very profitable field that I think could and should be explored. Now we come to the report~ There 1a something to be done -- that is obvious. We might perhaps do it more with Qur own means, developing the banks, but it has to be done. The only thing that I would draw to your attention is that due to the prestige of this Bank and the tact of the discussions with ECOSOC has raised very large hopes. I got some information showing that a number of people alread 51 STRICTLY ONFIDENTIAL take it for granted that it will be done, that that corpora- tion will operate from next April, and that the only important queetion now is where will the money come from. So I would like our staff to make as good a case as they c~n on the paper they will present 1n April to ECOSOC, because on the one hand we have all the questions asked around the Board, all the criticisms, it I may say so, that have been brought forward which are extremely important, but on the other hand we have a number of people who feel that it has to be done and to be done tomorrow. MR. SOMMERS: I can say that as far as the draft that 1s now under preparation is concerned, there isn't a winning argument for one view or another. What we are doing is to try to discuss it as best we can on a fair basis, not glossing over the advantages or difficulties. I think the paper should definitely not avoid the problems that are involved in any institution of this kind. THE CHAIRMAN: I think, too, that,before the staff and directors of the Bank oome out strongly ·in favor or creating such an organization, we ought to be convinced there is a need for such an organization. I think the point Mr. Beyen brought up is very good. There is no use coming out strongly for something and urging governments to put money up unless we are convinced, after our studies, it is needed. 52 STRICTLY ONFIDENTIAL There is frequently a lot of enthusiasm engendered in ECOSOC tor all kinds or animals, and the -minute you name one, the enthusiasm develops very fast. But I personally think there is a need for this. I want to know more about it . But I think we ought to all teel there is a need before we come out very strongly for it. MR. HOOKER: Mr. Chairman, it is something on which we will need ample time to get tirm positions of our govern- -.nts because we are going to get in sort of a turmoil here it we act in this Board as a Bank and then we go to ECOSOC and the ECOSOC representatives of the same governments say t-~Y want no part or this. We have to have very careful consideration and get the views or the governments. We c-.n•t make a tarce or the Board of Directors. THE CHAIRMAN: I think what we have been asked to do, !Ir. Hooker, is to make an analysis of this thing. We have not been asked to make a recommendation. MR. SOMMERS: We have been asked to say what contribu- t\one this could make that are not made by existing organ1- ·z ~t1ons. MR. BEYEN: One last thing, Mr. Chairman, I would like tb say about this. I am fully aware how useful it is to develop certain or the industries in the under-developed opuntries, as Mr. Bury has mentioned, but you come up against 53 STRICTLY ONFIDENTIAL the pos.i tion that it cuts into the exports of the government you are asking to put up the money. I could easily think of countries who would be very happy to export bottles to Malaya instead of helping Malaya put up a bottle factory behind a protective tariff. I am just pointing this out as something which might easily arise when you start to get the governments to work with you in that way. It is bad enough when it happens, but to dig your own grave is a thing that is too much to ask. MR. HEURTEMATTE: Mr. Chairman, I made my remarks a little while ago because three years ago there was a meeting of the Inter-American Institute of Commerce and Production. Now, that is not a governmental organization. It is an organization of private businessmen from all over this continent -- South, Central and North America. A seminar took place where the discussion was precisely how the investment of private capital abroad or within this continent could be encouraged. And no member at that particular time bankers, U.S. bankers from all the big banks here -- found as a difficulty the availability of those funds from private sources. Emphasis was made and they claimed that it was the most encouraging step that could be taken to encourage the investment of private capital abroad to create what they called at that meeting an appropriate climate or a desirable climate -- a desirable STRICTLY ONFIDENTIAL climate meaning proper legislation or an international agreement between those countries as to the protection or foreign investments. The whole discussion was narrowed around that one particular point. Now, I can say th.at within the Organization of American States we have tried very hard to try to get any such agree- ment, and up until now it has been very difficult. Some countries will not go any further than to say "We will give them exactly the same guarantees that we will give our nationals." So what have you got? You have no protection tor the future whatsoever. That is the reason I made my remarks a little while ago. I think we have to be very careful about this thing. Maybe today availability or capital from the International :Pinance Corporation might be a help, but I think that the other aspec is at least Just as important. THE CHAIRMAN: Well, 1r there 1s no further discussion - MR. BURY: I would like to suggest there be a separate study on the difference which the existence · and necessity for a government guarantee has made in the past. I know in Australia there has been more than one case where very big concerns there would like an International Bank loan but dropped it like a hot potat~ when they heard that a government guarantee was involved. But there must be many cases where 1t has gone further which would be STRICTLY ONFIDENTIAL 55 userul. THE CHAIRMAN: Well, we will send these papers around t o the Board and have a further discussion.