MGs International Bank for Reconstruction and Development "'4" 1 w A N K ELVET U I ELEVENTH ANNUAL REPORT . 1955-1 956 I I I I WBG ELEVENTH ANNUAL REPORT * 1955-1956 WASHINGTON 25, D.C. I WBG International Bank for Recornstrtiction and Development September 25, 1956 My dear Mr. Chairman: In accordance with Section 10 of the By-Laws of the International Bank for Reconstruction and Development, I have been authorized by the Execu- tive Directors to submit to the Board of Governors this Eleventh Annual Report of the Bank, for the fiscal year July 1, 1955 to June 30, 1956. The first section of this year's Report surveys the various activities of the Bank in the fiscal year, and includes a description of the progress made by Bank borrowers on some of the projects assisted by earlier loans. There then follow a tabular Statement of Bank loans, a country-by-country sum- mary of the year's operations, and the customary Appendices, including the Financial Statements as of June 30, 1956 and the Administrative Budget for the fiscal year ending June 30, 1957. Sincerely yours, EUGENE R. BLACK, President Chairman, Board of Governors, International Bank for Reconstruction and Development. FACTS FROM THE REPORT . . . . . . . . . . . . . . . . . . 5 THE YEAR'S ACTIVITIES . . . . . . . . . . . . . . . . . . . 7 Loans Made . . . . . . . . . . . . . . . . . . . . . 7 Financial Operations . . . . . . . . . . . . . . . . . . 12 Progress on Projects . . . . . . . . . . . . . . . . . . . 18 Advisory Assistance . . . . . . . . . . . . . . . . . . . 24 International Finance Corporation . . . . . . . . . . . . . . 27 Membership, Subscriptions and Staff . . . . . . . . . . . . . . 27 STATEMENT OF LOANS . . . . . . . . . . . . . . . . . . . 28 COUNTRY-BY-COUNTRY SUMMARY . . . . . . . . . . . . . . . 38 Africa. . . .. 39 Asia and the Middle East . . . . . . . . . . . . . . . . . 42 Australasia.. . .. 48 Europe. . . .. 48 Western Hemisphere . . . . . . . . . . . . . . . . . . . 50 Loans Classified by Purpose and Area (Table) . . . . . . . . . . . 58 APPENDICES . . . . . . . . . . . . . . . . . . . . . . 59 ( ,/ or set aside for lending an additional $129 million during the year, or three times as much as in the previous year. More than half the domestic currency subscriptions to the Bank's capital have now been lent or allocated to loans. FA C TS FR 0 M THE R EPO R T 1 A total of $72 million was raised by sales of parts of Bank loans, the great majority of them without the Bank's guarantee. Private banks participated in two-thirds of the loans made during the year, in each case without the Bank's guarantee. . The 26 loans made during the fiscal year totaled the t There was a slight reduction in the Bank's funded equivalent of $396 million. They were made in 20 debt, which now stands at the equivalent of $850 countries and territories, in six of which the Bank had million. Two new issues of bonds amounting to the not lent before. About 70%O of the total was to equivalent of $22 million were floated in Holland and develop electric power and improve transportation; Switzerland; and $23 million of previous issues were more than two-fifths was for projects in Asia. retired during the year. Lending since the Bank began operations now totals the equivalent of $2,720 million ($2,667 million net 1- Disbursements amounted to $284 million, of which of cancellations and refundings) in 42 countries. borrowers spent approximately half in the United States and 40% in Europe. Loan repayments and * Net earnings of the Bank reached a record level of prepayments came to $48 million. At the end of the $29.2 million, and total reserves rose to $228 million. year, the net total of loan commitments (including Borrowers met all payments of principal and interest both effective loans and those not yet effective) due during the year. Because of the general tightening amounted to the equivalent of $2,402 million. Of this, of money markets, the Bank raised its interest rates $704 million had not yet been disbursed. Included in toward the end of the year. the commitments were $190 million of loans sold or agreed to be sold to other investors. F The Bank continued to provide its members with advice on development problems: the reports of @> The Economic Development Institute completed its general survey missions to Syria and Malaya were first six-month course of study in June. The second published, as were two reports on Colombia, one course will begin in October, with about 20 officials dealing with the country's agriculture and the other from less developed countries as participants. with the development of the Cauca Valley. The Bank continued its practice of maintaining resident 1> At the end of the year the Bank had 58 member representatives in a number of countries to advise on countries and a subscribed capital of $9,050 million. development programming, and sent more specialized Afghanistan and Korea joined during the year. missions to a number of others. P> Shortly after the end of the fiscal year, the new 10' Of the capital subscribed to the Bank in the domestic International Finance Corporation came into existence currencies of its members, the Bank was able to lend as an affiliate of the Bank. .5. THE YEAR'S ACTIVITIES 'VV The year's 26 loans were made in 20 countries and territories, and were equivalent to $396 million. 6~~~~~~~~~'V iVV.V * * * * * TJNE 25, 1956, WAS THE TENTH grown less rapidly, was one-third higher than prewar. anniversary of the day on which the Bank began its There were signs, it is true, that this rate of growth operations. In establishing its position in international was slackening in some sectors. In the first half of finance and widening the scope of its activities, the 1956 some industrial countries were showing symp- Bank has been greatly helped by the striking improve- toms of economic strain, and world industrial pro- ments which have taken place in the general economic duction seems to have climbed less rapidly in that environment. In spite of many economic difficulties, period than it had in the preceding six months. Some the past decade has been characterized by unparalleled primary products, especially staple foods, were also economic growth. By 1956 world industrial production encountering price and market problems. Nonetheless, was running at a rate double the prewar peak; over the world as a whole, more people enjoyed more world trade was one-and-a-half times the highest real wealth in the past year than at any previous time prewar level; agricultural production, although it had in history. L O A N S M A D E This condition of world affairs has been reflected in There were a number of notable features in the past the activities of the Bank. Lending during the 12 year's lending operations. One was the increased months ending June 30, 1956, amounted to the activity of the Bank in Asia, where lending totaled equivalent of $396 million, and brought the total of $166 million. Another was the size of projects assisted: 'the Bank's loans in its first decade to $2,720 million, the Kariba power loan of $80 million was the largest consisting of 150 loans in 42 countries and territories. yet made for a single project by the Bank and also The year's 26 loans showed an increasingly wide the largest loan in Africa; the Tata Iron and Steel geographic spread. They were made in 20 countries loan of $75 million was the largest yet made for indus- and territories, in six of which-Algeria, Burma, try and also the largest for any purpose in Asia. Yet Guatemala, Haiti, Honduras, Lebanon-the Bank another aspect of the year's loans was the extent to had not previously lent. which they supported programs rather than single .7. projects. There were examples in all the main fields LOANS OF THE YEAR of the Bank's operations-power, transport, agri- (Expressed in millions of United States Dollars) culture and industry-and from every part of the world. Some of these programs have already been CoNItrvY Amount Purpose under way for several years and will take a long time Algeria . . . . . . $ 10.0 Power to complete. In these cases the Bank is providing Burma . .5.35 Railways continuous support for the development plans of 14.0 Ports member countries. Colombia . . . . . 16.5 Roads Since 1948 when lending began for economic Ecuador . . . . . 5.0 Power development, more Bank loans have been made for Finland. . . . . . 15.0 Power electric power than for any other purpose; loans for GuateraIa . . . 18.2 Roads transport have taken second place. These two pur- --------- Haiti .2.6 Roads poses together account for more than half of the Bank's lending. The remainder, apart from postwar Honduras . 4.2 Roads reconstruction loans, has been for industry, agri- India . ... . . 75.0 Industry culture and other development purposes, in that Japan ... . . . 5.3 Industry order. This pattern was repeated in the past year's --- 8.1 Industry lending. The bulk was for basic services; about 40% Lebanon . . . . 27.0 Multipurpose_project was for power, 30%, for transport and the balance Nicaragua . . . . . 7.1 Power .4 Power for industry, agriculture and multi-purpose projects. 1.5 Agriculture While the loans made during the year are described 3.2 Ports in greater detail in the country-by-country summary, Norway. . . . . 25.0 Power (page 38) certain salient features are discussed below. Pakistan . . . . . 4.2 Industry 14.8 Ports Electric Power Panama . . . . . 5.9 Roads Power loans this year totaled $148 million, excluding Peru .5.0 Roads the large investment in generating capacity included Rhodesia & Nyasaland . 80.0 Power in the multipurpose loan in Lebanon, which is South Africa . . . 25.2 Railways described under a later heading. Altogether, the year's Thailad. 12.0 Railways power loans are contributing to a total addition of -- Uruguay. .... 5.5 Power over one million kilowatts to capacity in the borrow- -5.Poe ing countries. This emphasis in Bank lending reflects TOTAL . . . . $396.05 the very rapid growth of power demand in recent decades. In the world as a whole, demand has increased The Bank believes that, in the effort to meet this since the war at an average of nearly 10% a year and growth of demand, insufficient attention is sometimes this expansion, which reflects the raising of living given to the role of power rate policies-a matter of standards as well as the continued growth of economic particular importance in less developed countries activity, is expected to continue. It is largely for this with inadequate capital markets. Public regulating reason that the potentialities of nuclear power are authorities are apt to be attracted by policies of so- being so closely studied by many countries; the Bank called "cheap" power, to such an extent in some cases is also engaged in its own investigations into the that rates do not even fully meet direct operating long-term possibilities of this new source of energy, costs. Experience in many countries has shown that especially in countries with limited access to alterna- such power is not cheap in the end; and that, if tive sources. development of an economy is not to be retarded by *8- deterioration of plant and severe shortages, rates should third, smaller plant in eastern Finland will be built cover all costs and also provide some contribution to with the help of a Bank loan of $15 million. A 235-mile the financing of future expansion. It has been said transmission line will link the Lapland plants with the that the really expensive kilowatt is the kilowatt that rest of the national network. Two thermal stations an economy needs but does not have. In all its lending will also be built in the south to provide a firm source for power, therefore, the Bank lays great emphasis of power for the main consuming centers. on the need for adequate rates. In Latin America two loans totaling $7.5 million The year's loan of $80 million to develop the were made in Nicaragua. One will assist in constructing hydroelectric potential of the Zambezi River in the a 30,000-kilowatt thermal plant in Managua, which Kariba Gorge will help to bring about a more than will double Nicaragua's generating capacity. The other threefold increase within the next sixteen years in the will finance the distribution of power from this station power capacity of the Federation of Rhodesia and in outlying towns that have never before enjoyed a Nyasaland. Power from Kariba will supply the dependable supply. These loans mark the first stage Northern Rhodesian copper-belt and also meet the in the transition from small, scattered units to a growing needs of industrial and other consumers in unified and efficient system. At the Bank's suggestion Southern Rhodesia. Mining at present accounts for a National Power Commission has been set up to two-thirds of the total load in the area to be served help to regulate and administer the expanded supply. and shortage of power has recently been limiting the A loan in Uruguay will help to pay for a 50,000- expansion of mining operations. Another power loan kilowatt thermal unit in Montevideo. This will be the in Africa was made in Algeria. It will assist a five-year second unit recently installed in the city, and will form program to add 135,000 kilowatts, an increase of part of a power and telephone expansion program for one-quarter, to the country's generating capacity. which the Bank has already lent $33 million. Of the remainder of the sum lent for power, three- A loan in Ecuador will help to expand power quarters will support projects in Europe, where the supplies in Quito and the surrounding areas, where Bank has now invested $130 million for a total the demand has recently risen to about twice the addition of 1.6 million kilowatts to generating available supply. A 14,500-kilowatt hydroelectric capacity. Demand for power in Europe is very high, station will be built, together with a small diesel plant and may treble or quadruple by 1975. This offers an needed to bring quick relief from the power shortage opportunity to certain countries to utilize their lakes and to provide power in the dry season. and mountain rivers to generate power for internal use and sometimes also for export. Transport An example of this was the loan of $25 million for In recent years improvements in transport services the Tokke project, which will exploit the power po- have occupied an increasingly important place in the tential of the lake system of south-eastern Norway. Bank's lending. In the year under review a total of The loan will help to finance the construction of a series $127 million was lent for this purpose. Bank financing of dams and tunnels and a new 400,000-kilowatt of transport has been many-sided; roads, railroads power station. Norway's present electric power costs and ports were all included in the year's lending. -are probably as low as anywhere in the world. This Roads took the largest share, with six loans totaling has encouraged investment in industries such as $52 million. In the past some countries have invested metals and chemicals which are large consumers of large sums in new highways which have since been power, and has led Norway to develop more generating allowed to become almost unusable and have there- capacity per head than any other country. fore not made a lasting contribution to the economy. In Finland two large hydroelectric plants with a The Bank believes that it can often contribute most total capacity of 220,000 kilowatts in Lapland, and a effectively to economic growth in less developed .9. countries by first assisting in the establishment, equip- a loan of $1.5 million will provide funds for the ment and training of efficient road maintenance Instituto de Fomento Nacional, a development agency services, rather than by financing new construction. of the government of Nicaragua which will supply The road loans made during the year were all in farmers with Bank-financed equipment on a rental Latin America-Colombia, Guatemala, Haiti, Hon- or credit basis. duras, Panama and Peru. The loan in Colombia will Because agriculture is vital to every economy and help to complete a highway reconstruction and provides the livelihood of at least two-thirds of the maintenance program for which two previous loans population of the less developed regions, the Bank had been made by the Bank. The five other loans, seeks to contribute to growth in this sector in the while including the rehabilitation and new construc- various ways open to it. The total of $228 million lent tion of important highways, will finance the equip- directly for agriculture and forestry since the Bank ment and services needed to improve government started operations does not adequately measure the highway organizations and to set up new maintenance extent to which Bank financing has stimulated farm services. The loans are also paying for the services of output. The Bank has financed transportation projects foreign consultants obtained on Bank advice to assist which have in many instances given an important in launching new maintenance organizations. stimulus to the movement of agricultural products. The Bank made three loans totaling the equivalent Several of its loans for power have also given con- of $43 million for railways. One loan will help to siderable help to agriculture by encouraging the modernize the equipment and track, and improve the expansion of processing industries and quickening operation of the rail network in Thailand. A second the tempo of development in rural areas. will help to provide wagons and railcars and build There are, of course, situations in which agricultural bridges in Burma. The third, a loan made in sterling, advance can be directly supported through large basic will provide finance for an expansion program to meet investments, particularly in irrigation, flood control growing traffic needs in South Africa. and land clearance. Nearly half of the total lent by Three loans totaling $32 million were made to the Bank directly for agriculture has been for projects improve ports in Asia and Latin America. Most of of this kind. The remainder, amounting to about $120 the East Wharves in Karachi, West Pakistan, had million and including a number of comparatively deteriorated to such an extent that they were in small loans, has been to improve storage and to danger of collapse; they are now being reconstructed. finance imports of equipment and livestock needed to In Burma improvements are required to handle the make possible more efficient and more intensive growing traffic now passing through Rangoon. A new farming methods. But progress in agriculture often quay is being financed in Corinto, main port of hinges less upon large investments of capital than upon Nicaragua, to provide for the very rapid postwar changes in methods used and crops sown or in the growth of the country's foreign trade. balance between livestock and cultivation. Also of basic importance are the adequacy of farm credit Agriculture and Multipurpose Projects agencies and questions of organization and technique The Bank lent $27 million to finance equipment and as they affect, for instance, extension services and the services of foreign consultants and contractors marketing arrangements. Improvements here fre- needed for a multipurpose project in the Middle East. quently depend more on the adoption of suitable This project, designed to double the electric generating price and other government policies, or on other kinds capacity of Lebanon and to irrigate 8,500 acres of of local initiative, than on external assistance. Recent fertile coastal land in the Beirut area, will help to experience has shown that areas where there has been carry out the first phase of a program for the develop- much investment directly in agriculture are not always ment of the Litani and Bisri rivers. In Latin America those where output has grown most rapidly. Striking .10. ..-id. 0 0 . . . ... . 1i' I 4~~~~~~~~~~~ India . Building a new steel-melting shop at the Tata lron The Co;npaniv is speniding $250 million to expand ingot steel and Steel Works at Jamjlshedpurs, wheere the Tata Comi7pany capacity to 2,000,000 long tons a year by 1958. In Juine 1956, operates the largest itntegrated steel planit in Souftlh Asia. the Bank nmade a $75 ,nillioll loan to assist thzis programn. increases have been achieved with the help of better machinery and automotive industries, all vital to the basic services, more favorable government policies, or continued economic growth of Japan. The funds will progress in organization and methods. be used to modernize existing plants rather than to establish new ones. Industry A loan of $4.2 million was made for a modern pulp Four loans totaling $93 million were made during the and paper mill close to the bamboo forests of East year, all in Asia, to help industrial growth. These Pakistan. The mill is at present producing writing and included a loan of $75 million in India to assist an wrapping paper at the rate of about 25,000 tons a expansion program aiming at a 60% increase in the year from local bamboo. This output is sufficient to capacity of the privately-owned Tata Iron and Steel meet all of Pakistan's present requirements of these works at Jamshedpur, already one of the largest kinds of paper. The Bank has worked closely with integrated steel plants in Asia. the company on technical, managerial and other Two loans, totaling $13.4 million, were made to the problems, and is currently discussing with it the Japan Development Bank. The proceeds are being recommendations arising out of a recent visit by a re-lent to private companies in the steel, ship-building, Bank consultant. 11. the balance on parts of loans that had been sold to other investors. Borrowers also repaid in advance of Net income for the year was the highest yet recorded, maturity a total of $3.6 million. Total repayments of amounting to $29.2 million compared with $24.7 principal, including prepayments, thus amounted to million in the preceding year. This income was carried slightly over $48 million. to a Supplemental Reserve against losses on loans and Because of a general rise in money rates in the guarantees, increasing that Reserve to $151 million. world's major capital markets, the Bank's interest Loan commissions, representing a charge of 1% on charges, which are based upon the estimated cost of outstanding balances of all loans, totaled $15 million. borrowing by the Bank at the time a loan is made, The Articles of Agreement require that these com- were raised toward the end of the year. Including the missions be credited to a Special Reserve. With th-is 1% commission, the rate on loans of more than 15 year's addition the Special Reserve rose to $77 million. years was raised from 43/4% to 5%. The new rate for At the end of the year total reserves thus stood at shorter periods was set at 43/4%0, compared with the $228 million. two previous rates of 41¼4% up to ten years and 41/2% Gross income for the year, excluding loan commis- from 11 to 15 years. These changes returned Bank sions, was $64 million compared with $59 million in loan rates to the level of late 1953. Corresponding the preceding year. It was made up of $54 million adjustments were made in the prices at which loans from loans and $10 million from investments. Interest were sold from the Bank's portfolio. charges and other expenses amounted to $35 million compared with $34 million a year earlier. Funds A vailable for Lenlding Borrowers met all repayments due during the year, Total additions to the Bank's lendable funds during amounting to almost $45 million; of this slightly over the year amounted to the equivalent of $253 million, $21 million was paid on loans held by the Bank, and the year's operations being financed without net SUMMARY OF LENDABLE FUNDS (C'umlnatit e totals expressed in millionls of United States Dollars) Jtiune 30, 1955 Jufne 30, 1956 Net Clianige 2%x portion of subscription of all members . . . . . . . . . . 177.8 178.4 + 0.6 18%o portion of subscription made available by members . . . . . . 764.5 893.1 +128.6 Total available capital subscriptions . . . . . . . . . . . . 942.3 1,071.5 +129.2 From sales of bonds . . . . . . . . . . . . . . . . . 851.6 850.2 - 1.4 From parts of loans sold or agreed to be sold . . . . . . . . . 200.1 272.1* + 72.0 From principal repayments and prepayments . . . . . . . . . . 139.3 161.8* + 22.5 Income from operations, including exchange adjustments . . . . . . 128.6 159.5 + 30.9 Gross Total . . . . . . . . . . . . . . . . . . . 2,261.9 2,515.1 +253.2 Less Funds Disbursed on Loans . . . . . . . . . . . . . 1,679.7 1,963.7 +284.0 Balance. . . . . . .... . . . . . . . . . . . 582.2 551.4 - 30.8 Additional principal repayments amounting to about $3 million have been received and sales of loans amounting to about $4 million have been made; bLut these sums represent 18C,1 funds which have not been made available for re-lending by the releasing member country, and thus are not included in the total of the Bank's lendable funds. .12. additions to funded debt. In fact, although there were USE OF CAPITAL SUBSCRIPTIONS two new bond issues in Europe, the retirement of The paid-in contributions of member governments to earlier issues caused a slight decline in the total of Bank the Bank's lendable funds consist of two elements. bonds outstanding. The largest addition to lendable The first is the 2% of each country's subscription, funds arose from further sums made available by mem- which is payable in gold or dollars; the total of such ber countries' releases of parts of their capital subscrip- payments to the Bank now stands at $178 million. tions payable in their own currencies; the Bank was The second element, 18%/, of the subscription, is paid able to allocate to loans $129 million of such releases, in the currency of the member country, and can be nearly three times the total in the preceding year. lent only with its approval. Sales of parts of Bank loans, all of them by private The total of this 18% capital on the books of the placement, amounted to the equivalent of $72 million. Bank is equivalent to $1,629 million. It was expected Principal repaid to the Bank and available for new by the Bank's founders that these funds would be lending amounted to $23 million, compared with made available to it for use in lending operations as $123 million last year, when there were large repay- soon as early postwar stringencies had been overcome. ments in advance of maturity. Net earnings together To date, however, the total that the Bank has been with exchange adjustments provided $31 million. able to use in its lending, including amounts allocated The table, "Summary of Lendable Funds," at the to future disbursements, is equivalent to $893 million, foot of the opposite page, summarizes the sources of or about half of the total. Of this, $625 million is the funds available for lending at the end of the last made up of the original 18%7G capital subscriptions of two fiscal years, and the net change over the period. the United States and Canada. The remainder is 32. . .6. *13- made up of $256 million from European countries, years, and with foreign exchange reserves now mainly $5.8 million from South Africa, $5 million from Japan, restored from earlier low levels, an increasing number and $1.6 million from two member countries in Latin of the Bank's member countries are exporting capital America-Mexico and Peru. in various ways and in some volume. The Bank The rest of the 18%, funds, a sum equivalent to believes that these countries should not lose sight of $736 million, has not been used or allocated, either their obligation, flowing from the Articles of Agree- because the member countries concerned have not ment, to use the Bank as a channel for the export of given their consent, or because restrictions placed on capital to the extent of their 18%o subscriptions. the use of the funds have been such as to prevent the During the year additional releases of 18% capital Bank from using them. These restrictions include used or allocated to loans totaled $129 million. These requirements for further consultation before use or releases came mainly from European member coun- for the matching of releases by equal expenditure of tries, the largest contributions being made by the other Bank funds in the territories of the member United Kingdom and Germany. Of the United country concerned; in other cases expenditure is only Kingdom 1 8% funds, an additional amount equivalent permitted in the particular member country making to $58 million was allocated during the year. Germany the release, or a limit is placed on the rate of disburse- agreed to release $56 million, representing the whole ment. In addition, many countries have not yet given balance of its 18%/o subscription, on a freely con- the Bank permission to re-lend 18%7 funds repaid to vertible basis; but not all of this is as yet available for it. The importance of this aspect is illustrated by the use since the release is to be made in stages over a fact that, of the original United States releases, $227 period of years. Funds released by Germany and used million has since been repaid and re-lent. The maxi- or allocated during the year were equivalent to $34 mum contribution is made by member governments million. Austria, Belgium, Denmark, France, Italy, the to the Bank's funds only when they can be freely lent Netherlands and Sweden also made releases that can and re-lent. be converted into certain other currencies, or liberal- For these reasons, the Bank has continued to press ized the terms of releases previously made. during the year for more releases to be made available SALES OF PARTS OF LOANS to it from the 18% subscriptions of its member The $72 million raised through sales of parts of Bank countries outside North America. With the very high loans to investors compares with the record figure of level of international trade built up over the past ten $99 million in 1954-55. This decrease reflected the more stringent conditions prevailing in the main financial centers. More than four-fifths of the sales 18% CAPITAL SUBSCRIPTIONS in the year under review were made without the JUNE 30, 1956 Bank's guarantee. (Expressed in tnillions of United States dollars) Maturities taken up by private banks at the time the loans were made contributed $14 million toward Used or Used or Region allocated to Total 18% allocated as total sales. There were participations of this kind, in existing loans capital percent of total Canada and every case without the Bank's guarantee, in 18 out of Unted States. $624.9 $ 630.0 99 the 26 loans made during the year. The banks par- Europe . . . 255.8 586.8 44 ticipating, nine in the United States, three in Europe Latin America . 1.6 60.5 3 and one in Canada, included several which had not Africa . . . 5.8 28.1 21 peiul atcptd Asia . . . . 5.0 287.7 2 previously participated. Australasia . . - 36.0 - The remainder of the total raised came from sales Tts 81 161 5by private placement of parts of loans already made. Totals $893. l _ ,629. l MThese sales amounted to $58 million. Purchasers .14. included central and private banks, investment FUNDS FROM BOND ISSUES houses, an airline, a private foundation and a corpo- New bond issues sold during the year amounted to the ration pension fund. equivalent of $22 million,compared with $88 million in As indicated in the accompanying chart, countries the previous year. This decrease was partly due to the outside the United States have become increasingly additional funds available from 18%c releases and other interested in the purchase of parts of Bank loans. At receipts; it also reflected the Bank's earlier decision the end of the fiscal year total sales of loans amounted not to hold funds on hand sufficient to meet all loan to $276 million, of which sales to purchasers outside commitments. At the end of the year the balance of the United States represented 57% and purchasers in funds on hand, as shown in the accompanying table the United States 43%. Of the total of $190 million "Summary of Lendable Funds," was $551 million, still outstanding at the end of the year, only $26 million compared with undisbursed loan commitments of carried the Bank's guarantee. $704 million. By holding funds to meet not less than Investors showed further interest in the type of one year's expected disbursements, the Bank remains joint operation that the Bank had developed with the amply protected against unforeseen developments, capital market in the preceding year. Simultaneously while at the same time reducing its interest costs. with the Bank's £9 million loan to South Africa, a As in the preceding year, all the new bond issues public issue of $25 million was successfully arranged were sold outside the United States, reflecting both by an investment banking group in the United States, the strength of the international demand for Bank the proceeds to be used for the same purposes as the obligations, and the need for more non-dollar cur- loan. This issue, consisting mainly of ten-year bonds, rencies in Bank operations. was the first public offering by the South African A public issue of Netherlands guilder bonds, the Government in the United States. second to be made in that currency by the Bank, was *15 offered in August 1955. It consisted of 20-year bonds was held by investors in the United States. The in an amount of f40 million (equivalent to S10.5 accompanying chart shows the change that has taken million) at 31/2%. In November the Bank offered, also place over the last three years in the international at 3½2, an issue of 20-year bonds in an amount of distribution of the Bank's obligations. Sw fr 50 million (equivalent to $11.6 million). This The principal holders in the United States were was the sixth public issue of Bank bonds in Switzer- pension and trust funds with more than 40% of the land. It brought to 15 the total of public offerings and total, and insurance companies and savings banks, private placements so far made by the Bank in which each held about 25%; the balance of the currencies other than United States dollars. holdings in the United States, about 5% of the total, Redemptions totaled $23 million over the year, was held by commercial banks and other investors. resulting in a net reduction of $1 million in the The remainder of the bonds, estimated at the Bank's funded debt. In August 1955, the Bank re- equivalent of $380 million and representing 45% of deemed in advance of maturity Can$13.6 million of the total outstanding, was held outside the United its 407G 10-year Canadian dollar bonds of 1952. It also States by banks, insurance companies, pension and redeemed at maturity $10 million of its 2% serial trust funds, and other private institutional and indi- United States dollars bonds of 1950, and Sw fr 5 vidual investors, as well as by central banks and million of its 21/2%7 serial Swiss franc bonds of 1950. government agencies. Included in the amount held At the end of the year Bank bonds outstanding outside the United States was $225 million in United totaled the equivalent of $850 million. Of this it is States dollar bonds, accounting for one-third of the estimated that about $470 million, representing 55%,, outstanding total of those bonds. *16- Disbursements through the reconstruction stage, however, other manufacturing countries began to compete more At the equivalent of $284 million, disbursements actively for business, and their proportion of the showed a slight increase over the rate in the preceding orders increased. year. Total disbursements since the Bank began Orders for equipment, supplies and services financed operations had risen by the end of the year to $1,964 by Bank loans are, of course, placed by the Bank's million. borrowers and not by the Bank. The estimated dis- In the ten years since the Bank started operations, tribution of disbursements under Bank loans is shown two-thirds of its disbursements have been for goods in the accompanying table. Although there are bought in North America. This cumulative figure inevitably a number of uncertainties in the allocation reflects the fact that, in the early postwar period of between countries, the table gives some indication of acute dollar shortage, borrowers looked to the Bank the extent to which different countries and areas have primarily for financing purchases of United States and been able to compete successfully for business in the Canadian supplies. As the rest of the world passed types of heavy equipment mainly financed by the Bank. DISTRIBUTION OF LOAN EXPENDITURES IN INDIVIDUAL COUNTRIES FISCAL YEARS ENDING JUNE 30 (Estimates rouinded to equlivalent in millionis of United States Dollars) Cumnulative total Cutnulative total Disbursemitentts by through 1953 1954 1955 1956 to date borrowers for __- imports from: Amount % Amount % Amount iG Amount % Aiount % North America U. S . . . $724.5 68.5 $128.5 50.7 $129.3 54.0 $114.9 50.5 $1097.3 61.7 Canada . . . 71.4 6.8 7.2 2.8 7.9 3.3 16.0 7.0 102.5 5.8 Europe U. K. . . . 59.3 5.6 54.9 21.7 57.4 23.9 30.0 13.2 201.6 11.3 Germany . . 24.7 2.3 22.9 9.0 15.3 6.4 32.0 14.1 94.8 5.3 France . . . 19.3 1.8 12.3 4.9 10.1 4.2 7.5 3.3 49.3 2.8 Belgium . . . 45.5 4.3 9.9 3.9 1.8 .8 6.5 2.9 63.7 3.6 Switzerland . . 22.1 2.1 5.5 2.2 4.6 1.9 5.3 2.3 37.5 2.1 Sweden . . . 4.5 .4 2.8 1.1 4.4 1.8 3.4 1.5 15.1 .9 Other member countries in Europe. . . 17.8 1.7 6.9 2.7 5.4 2.3 7.6 3.3 37.7 2.1 All other countries 68.4 6.5 2.4 1.0 3.3 1.4 4.3 1.9 78.4 4.4 TOTALS . . . $1057.5 100.0 $253.3 100.0 $239.5 100.0 $227.5 100.0 $1777.9 100.0 OTHER DISBURSEMENTS* 45.8 48.9 34.7 56.4 185.8 GRAND TOTAL $1103.3 $302.2 $274.2 $283.9 $1963.7 These include disbursements on loans in which the funds are used for local expenditures or for broad development programs in which the items imported with Bank funds are not specified. *17. C frs e r~ R. 7-, -.7 -_ 7~u, t w~ ~ -r Including loans made during the year the Bank has Some examples are given below to illustrate the now provided finance toward the addition of nearly results that are being achieved by Bank borrowers; no 6½/2 million kilowatts to the generating capacity of its attempt is made, however, to describe all the work member countries, representing an amount equal to accomplished during the year. The lending that is about twice the whole capacity of Brazil or India. helping to finance the projects referred to is tabulated The Bank has also financed more than a dozen in the Statement of Loans on pages 28-37. national programs of highway improvements, and about the same number of railway modernization Africa programs. In addition, fifteen vital ports have been In the Federation of Rhodesia and Nyasaland a 200- renovated with the aid of Bank funds. Apart from this mile rail link was completed to provide this land- investment in basic services, the Bank has supported a locked area with a new outlet to the sea. This South wide range of agricultural and industrial develop- East Connection runs from Bannockburn in the ments. Bulawayo area to the Mozambique border, where it Continued progress was made during the year by joins another new line, built by the Portuguese borrowers in carrying forward projects and programs Government and terminating at the port of Lourenvo financed by Bank loans of earlier years. As was to be Marques. This new construction, together with diesel expected, some enterprises encountered difficulties, locomotives and freight cars also included in the either during construction or after completion. Some- program assisted by the Bank, has helped to reduce times the problems were attributable to changes in congestion at Beira, the port which formerly had to the local or world economy, or to unforeseen construc- handle most of the overseas trade of the Federation. tion difficulties or even to bad weather. But other Already half the Federation's copper exports and difficulties, both in Government projects and in more than half of its asbestos exports, as well as a private undertakings, were internal; they resulted considerable volume of imports, are carried by the from weaknesses in management, whose functions are South East Connection. often given too narrow an interpretation, particularly In South Africa a railway expansion program in countries unused to modern operating techniques financed with the help of $50 million lent in earlier in public utilities and other large-scale enterprises. It years by the Bank has already done much to provide is not enough for management to possess the ability for the large increase in traffic. The Bank loans were to supervise the technical processes of production. used mainly for steam and electric locomotives, rolling Other qualities are needed for the success of the stock, rails and workshop equipment. Exports of enterprise as a whole, and their absence can result in coal, chrome, manganese, iron ore and other products, delays and financial losses due to inadequate prepara- of which an estimated 7 million tons a year have been tion, poor planning, inappropriate accounting or held back from production through lack of transport, personnel systems, or inflexible output and price are now moving more readily. The new loan of £9 policies. million made during the year will contribute to the In several instances during the year the Bank further investment now required on account of the became aware of such difficulties, and was able to continued growth of traffic. assist in overcoming them. In this respect as in others, French West Africa is now receiving the final close contact with borrowers on both the execution deliveries of diesel locomotives financed by a Bank and operation of projects enabled the Bank to offer loan of $7.5 million as part of a $90 million re- timely help. habilitation program. The railway company estimates .18- AK Rhodesia and Nyasaland . Already hlalf of the new Fede- from BannocA -buirnl ntear Bulawayo, to thle Mozamilbique ration's exports of copper and asbestos flow to foreign bordet where it mneets anothter neew line, built by tlte markets by a new trade route-a rail connection t unwuziiig Pot tuguecse Govetrument, to the port of Louirenco Marques. that a saving equivalent to approximately $4,500 per Asia anid Middlle East month will result from replacement of each steam Three projects concerned with the control and use of locomotive by a diesel on the routes where traffic river water were completed or carried an important is heaviest. stage forward in Asia. In Iraq a $45-million flood- With the help of Bank funds a telecommunications control project, part of a larger plan which will also project in Ethiopia has brought considerable improve- include irrigation services, was completed this year in ments in contact between main Ethiopian cities and time to save Baghdad from flood damage during the also with foreign capitals. This has been achieved by season of high water. A barrage located on the Tigris the installation of new teletype and telephone circuits 50 miles above Baghdad directs flood water into a between principal cities and by the construction of diversion channel leading into a barren depression more powerful radio receivers and transmitters to known as the Wadi Tharthar. These works provide carry international traffic. Automatic telephone ex- protection against the floods from which the capital changes have been installed in Addis Ababa and and surrounding agricultural areas have suffered from Gondar, and manual exchanges in other towns. earliest times, and which in 1954 caused damage 19* estimated at more than the total cost of the project. products, fertilizer and other heavy cargoes sustaining The loan for this project was made six years ago, and the continued industrial growth of the area. was fully repaid early in 1955 in advance of maturity. The Konar Dam, which is helping to regulate the Works completed in India will provide additional flow of water in the upper reaches of the Damodar power and water transport as well as irrigation River, was completed during the year. The water services in the Damodar Valley, the country's most stored by the dam will later serve as a source of important industrial area. Progress made tinder a hydroelectric power, and is already being used for very large multi-purpose development program under- cooling in the thermal power plant built at Bokaro taken by the Damodar Valley Corporation includes with the help of Bank funds. Some of the power completion of a barrage at Durgapur, which forms prodtIced at Bokaro is supplied to the Indian Iron and part of an irrigation system to provide water for one Steel Company and the Tata Iron and Steel Company, million acres in West Bengal. In the same area good to both of which the Bank has made loans. Increased progress is being made on an 80-mile channel that power supplies are encouraging the erection of many will serve both as the main source of irrigation water small factories in the area, and rapid industrial and as a navigation canal linking the Damodar River growth is taking place throughout the Valley. with the Hooghly River above Calcutta. The canal is On the Chao Phya, the major river artery of expected to be completed late in 1957 and will then Thailand, the main construction works of a barrage be available to carry cement, coal, iron and steel and navigation lock near Chainat, 100 miles north I'akistan . A control station on the Saii Gas pipeline, first 16-inch pipeline brings natural gas friom the Sui field in cf its kind in Sonth Asia, which rinns over 350 mniles of' Baluclhistan tlhrouigh the Induis Valley to Karachi. The difficult terrain, and twice crosses the River Indcts. This gas provides fuel for power generation and for indutstry. *20. of Bangkok, have been completed. The project of nearly $1,100 million; two-thirds of this has been will provide irrigation water for about 21/4 million for land reclamation and improvement, flood and acres, thus increasing the crops of rice, soya beans erosion control and water supply, and the remainder and other products needed for both home and export for roads, railways, industry and tourist services. markets. It will also provide for year-round navigation With various new or expanded plants now operating on the principal waterways in the Central Plain. in the South there has been a considerable increase in Power supplies available to feed vital industries as industrial employment, while more intensive farming well as commercial and residential markets were was marked by a doubling of the number of tractors increased by the completion of two power plants with in the first four years of the program. Higher living a total capacity of 141,000 kilowatts in Japan. Another standards and increased economic activity have been thermal plant financed by the Bank is already partly reflected in a doubling of power consumption and a in operation and is expected to be completed, with a rapid increase in the number of cars on the roads. capacity of 150,000 kilowatts, within a few months. The effort is directed toward the South, where farm The three plants represent an increase of 3% in the output per acre has often been only about lhalf that total public power supply of Japan. Power from these of the North, but the whole country is benefiting from plants is serving light and heavy industries on Honshu, the increased business arising out of the Cassa's and Japan's largest coal-producing area on Kyushu. activities. The first natural gas pipeline in South Asia came In Finland two hydroelectric stations were completed into operation nine months ago in West Pakistan. during the year, and another is expected to come into This 16-inch pipeline stretches 346 miles from the Sui operation within a few months. This will add a total gas fields in Baluchistan to Karachi. Construction of 95,000 kilowatts, representing an increase of about began in the summer of 1954 and the first delivery of 7% in Finland's present capacity. The pulp and paper gas was made in September 1955; the laying of pipe industry, which accounts for by far the largest part of was completed in five and one-half months. Apart Finland's exports, takes nearly half the power. New from small supplies for Hyderabad and Sukkur, main pulp manufacturing capacity added during the year at deliveries are to large consumers in the Karachi area, existing mills with the help of the Bank amounted to including the electric power company, cement, tex- about 250,000 tons. tiles, ceramics and other industries. A 30,000-kilowatt A multi-purpose dam completed during the year on power station being built with Bank help will also the Seyhan River in south-central Tu,key has brought start using the gas within a few months, and first a general improvement in the economic prospects of deliveries to homes will begin shortly. The throughput the area. A hydroelectric station with a capacity of of the line at present averages 20 million cubic feet 36,000 kilowatts is now in operation, and will allow per day, and is expected to reach twice this figure by for the further industrial growth of three nearby the end of 1956. towns. Certain problems concerning drainage in the Adana Plain are being attacked so that work can go Euirope forward on plans to irrigate 350,000 acres of fertile Bank loans contributed to both industry and agri- land in the area of the dam. Cotton, grain, oilseeds, culture in a number of European countries. In Italy and citrus fruits are expected to be the major crops, the Bank has now lent a total of $90 million to the and part of the increased production will be available Cassa per il Mezzogiorno, a government agency set for export. The floods which formerly ravaged this up to launch a far-reaching attack on the traditional part of Turkey caused damage estimated at the poverty of the South. This 12-year program has now equivalent of $3 million a year to crops and property. reached mid-point. Public and private investments In Belgium the Baudouin Lock at the approaches already approved under it amount to the equivalent to Antwerp was completed. The new lock can handle *21t Belgium o The recently completed Baudouin Lock, at the PorXt of Antwerp, can accommlodate fosir 10,000-ton shaips at a time. This lock is the first project to be completed in a ser-ies of schemies for canal mioderniization and imiprovement _f great importance to Belgian transport and trade; the Bank made a loan ofi$20 million Jwr this purpose in 1954. 170 miles of roads reconstructed with Bank help and, although paving will take several more years to complete, mtuch traffic is already using the roads. The benefits of the program are illustrated by the fact that the cost of transporting coffee to the Matagalpa market from the surrounding hills was cut to one- quarter by the opening of a new road link across a nearby mountain range. Large additions were made during the year to the power capacity installed with the help of Bank funds. four 10,000-ton vessels at a time, giving it a capacity In Mexico the Copisi6n Federal de Electricidad foLir times that of the old lock. Because of the elimi- completed three hydroelectric plants and one thermal nation of delays, which formerly lasted as long as plant with a total capacity of over 100,000 kilowatts. 18 hours at times of heavy traffic, substantial savings Power from two of these plants, forming part of the are already being achieved by ships using the port. Miguel Alemin system in the mountains west of Mexico City, is supplied to the city through the net- Latiao America work of the Mexican Light and Power Company, also The economy of Colomibia is benefiting from work so a Bank borrower. The Company has recently more far accomplished with the help of three Bank loans than doubled its own generating capacity by com- for a road program under which 2,000 miles of main pleting new plants with a total capacity of 153,000 highway are being improved. Three-quarters of the kilowatts. With the help of these investments power grading and half of the paving have now been cor- deliveries in the Mexico City area were 12% higher pleted, and on a considerable part of the mileage all in 1955 than in the previous year. work has been finished. Traffic has already grown In Brazil a second 12,000-kilowatt hydroelectric rapidly; motor fuel consumption and vehicle regis- unit was brouight into operation five months ahead of trations have doubled in the last four years. Significant schedule at Itutinga. This completed a project to reductions in the cost of transport and in travel time increase the supply in the Belo Horizonte area, in between regions have been achieved. Meanwhile southern Minas Gerais, where a large part of Brazil's Colombian agriculture has been strengthened by a industrial activity is centered. Four-fifths of the plant's loan which has financed imports of agricultural output is expected to be used for industry, with a steel equipment, including the purchase of nearly 1,000 mill and a cement factory as the largest consumers. tractors during the year. This is a run-of-river plant producing power at Construction of a network of good primary roads appreciably lower costs than in other parts of Brazil. in Nicaragua is now nearing completion. Grading and Ways in which the Bank can help to increase food structurcs havc been finished on a grcat part of the supplies and stimulate agricultural output were -22. :~~~~~~~~~~~~~~ Peru The new grain elevators and loading towers in the Port of Callao wvere imt7ported and installed with the aid of a Bank loan of $2.5 million. These installations, together- with other new equipment, have helped to transform Callao, previously a cause of congestion and delay for shipping, into one of the most efficient seaports in Latin America. illustrated in two Latin American countries. A grain processing and storage plant completed during the year is for the first time making it possible to use modern methods of handling locally-produced food i grains in Panama. Hitherto there has been no effective means of drying, cleaning and storing corn and beans, the main food crops grown in Panama, and 20 to 30% of the year's output has been lost. Farmers have _ received very low prices during the glut season, while consumers have had to pay scarcity prices during the remainder of the year. All-year availability of food to adopt new production methods. Government grains kept in good condition in the new plant is machinery pools, using equipment financed by the expected to eliminate the need to pay for imports of Bank, have increased leveling and other reclamation corn and beans, and at the same time improve work fourfold since 1952. A recent decline in the nutritional standards. amount of cultivation carried out by the pools partly In Peru also, new grain-handling and storage equip- reflects increased buying by farmers of their own ment, installed with the proceeds of a Bank loan, tractors. In line with this increased demand, funds came into operation in the Port of Callao. This have more recently been provided by the Bank for an completed a modernization program which, under agricultural bank which is now importing and selling good management, has made Callao one of the most on credit about 150 tractors a year, representing one- efficient ports in Latin America. Wheat imports occupy quarter of the total imported. an important position in the food supply of Peru, and Work in agriculture and transport financed by a constitute a substantial part of the incoming cargo loan nearly five years ago in Paraguay has progressed handled in Callao. In the absence of any kind of bulk- more slowly than had been expected. But delays are handling equipment, wheat worth about $500,000 was being gradually overcome. The 250-mile highway lost each year during unloading. In addition to between Asunci6n and Encarnacion on the Parana eliminating the greater part of this loss, use of the River is nearing completion. It provides a direct and new discharging towers and silos has contributed to dependable link between the capital and the promising large reductions in shipping costs by making it agricultural lands in south-eastern Paraguay, and possible to unload a ship in about 20 hours compared further work is now being undertaken on roads in the with eight to ten days previously. These installations area. At the same time arrangements are being made were completed at substantially less than the estimated to use Bank funds to acquire a dredge, principally cost, and the remaining funds are being used for for use on the Paraguay River, and thus to improve further improvements in the Port of Callao. river navigation, which forms an essential part of Bank funds have also been helping Peru's farmers the transport system of Paraguay. *23 Apart from its loans, the Bank has continued to give mission was the first to confine its attention to the assistance on other problems of development, and development problems of a particular region. particularly on the programming of public investment The Bank's missions have now been in operation and the formulation of public policies bearing on long enough for some of the effects to be seen. In no economic development. case, of course, has a country adopted and imple- During the year work was carried out on the reports mented the recommendations of a mission in toto. A of four missions which visited member countries or report must go through a process of selection, adapta- territories to prepare recommendations for programs tion and assimilation by the country itself. Results of economic development: the reports on Syria and have varied from country to country on the basis of Malaya were published, and the report of the mission many factors such as the leadership and interest to Jordan was nearing completion. A mission to study available in the government, political considerations the economic prospects and problems of the Italian that affect economic decisions, and the extent to which Trust Territory of Sonmaliland finished its field work the mission's recommendations are practical and during the year. In addition, the Bank's resident persuasive. mission is completing a report and recommendations Nevertheless, a substantial number of specific on the economic development of Panama. accomplishments can be attributed in whole or in part The Bank continued its policy of posting resident to the work of Bank missions. A few examples are the representatives in a number of countries to give highway programs in Colom1bia and Honduras, newly- assistance in dealing with development problems. The undertaken railway rehabilitation in Jamaica, the countries concerned were Colonmbia, Ecuador, Guate- passage of income tax legislation in Nicaragua, mala, Honduras, Nicaragua and Panama. changes in the education program in Malaya, the Two missions drew up recommendations on par- adoption of federal and regional development pro- ticular aspects of development in Colombia. One grams and the reorganization of development institu- advised the newly created Cauca Valley Corporation tions in Nigeria, the preparation of a five-year invest- on initial steps to be taken in the coordinated develop- ment program in Guatemala, and the reorganization of ment of the resources of the Valley; the other made public debt administration in Syria. There is of course recommendations for a long-term program to develop no way for the Bank to learn of all the effects of the agriculture. many mission recommendations-whether, for in- Beginning with the mission that undertook a general stance, they have been an important factor making survey of the economy of Colombia in 1949, the Bank for an increase in a budget for agricultural research, now has given 21 countries assistance in programming or for better gathering of statistics by government their development. The Bank has most often given this offices, or for the rejection of doubtful development help through general survey missions, of which it has projects. organized 14. It has also employed resident missions, Often the reports represent the first attempt in a of which there have been four, to advise generally on country to make a systematic analysis of the economy measures for economic development; and in one case, as a whole and to project the developmental process a joint working party composed of Bank economists over a number of years. A few countries have an- and representatives of the member country made an nounced their intention to use the report as the official investigation of investment trends and needs through- basis of development planning. A number of countries out the economy. Three other missions have dealt with have created new bodies for central economic pro- agricultural development alone; the Cauca Valley gramming and others have changed or strengthened .24. their approach to programming. Regardless of whether March 1957, was taken under consideration by the formal action of this kind has been taken, one of the two governments toward the end of the fiscal year. most important results of the missions is the influence The firm of engineering consultants engaged by the they have exerted in favor of a coordinated long-term Bank to collaborate in the discussions has completed approach to development problems. a number of studies of the problems involved. As the The needs of the Bank's member countries for year closed the Bank was conferring with the partici- advisory assistance are varied and changing, and the pating Governments concerning the continuation of Bank's attitude is therefore kept flexible. Apart from the discussions. general survey missions and related activities, the Bank continued during the year to provide assistance Economic Development Institute to a number of countries on specific problems. A new kind of international staff college came into In Mexico the Bank collaborated in an analysis existence under Bank sponsorship during the year. of the country's future power needs and of ways With financial support from the Ford and Rockefeller in which these could be financed. A report has Foundations the Bank set up the Economic Develop- been drawn up and submitted to the Government and ment Institute in Washington with the objective of others concerned. A mission visited Pakistan to discuss contributing to an improvement in the quality of a proposal to establish a privately-owned industrial economic management in government and helping credit and investment company and in Ceylon staff officials from less-developed countries to equip them- members gave advice on the organization of the selves for dealing with the practical problems of Development Finance Corporation. Staff members development. The Institute's first six-month course also spent several weeks in Uruguay to advise on the was concluded in June. possibilities of strengthening the capital market as a The difficulties encountered in some of the work of source of funds for productive investment. Bank the Bank, as of other agencies concerned with eco- consultants gave advice in Japan on land reclamation. nomic development, have underlined the fact that As in past years, the Bank helped member countries shortage of capital is not the only obstacle to progress. to obtain specialists for economic development work. Inexperience in formulating sound economic and They were concerned with such different matters as financial policies, and shortage of trained adminis- sulphur processing in Iraq, railway operations in trators, are often even more serious handicaps. In Thailand, public debt management in Syria and port various cases they have led to misdirection of effort administration in Turkey. The Bank helped to find and waste of urgently-needed resources. foreign experts to work in the Seven Year Plan Since the Institute's courses are attended by officials Organization of Iran, and a Bank staff member on in positions of authority from many countries and are leave of absence is chief of the bureau in which these intended to increase their familiarity with practical experts have been gathered. Another staff member on problems, the Institute's time is devoted to discussion leave continued to serve during the year as director of and the pooling of experience rather than to formal the Ceylon Institute of Scientific and Industrial instruction. Its syllabus concentrates on actual situ- Research. ations and on policies concerned with those sectors of With Bank collaboration, discussions continued the economy that are of special importance to develop- between India and Pakistan regarding the use of the ment. Full use is made of the lessons that can be Indus waters. An inter-governmental agreement learned from studying the planning and the results covering additional withdrawals of water by India for achieved in the case of particular projects. the October 1955-March 1956 crop season was The first course was attended by fourteen officials reached early in that season. A new agreement, from as many member countries-Colombia, Haiti covering the next two crop periods and ending in and Mexico in Latin America; Ceylon, India, Japan, .25. Plakistan. the Philippines and Thailand in Asia; the and Mr. P. S. Narayan Prasad, Executive Director B3elgian Congo, Egypt, Nigeria and Uganda in Africa; for India in the International Monetary Fund, to and Yugoslavia in Europe. The officials occupy senior conduct seminars in subjects in which they have positions in finance ministries, ministries of economy, special qualifications. In addition, guest speakers of central banks, planning bodies or other government recognized authority from government service and agencies responsible for economic development plans academic and business life addressed the Institute or and policies. They will thus be directly concerned, led seminar discussions. after returning to their homes, with the kind of The Institute was launched on a tentative basis and problems studied at the Institute and should be in a will be judged according to the results achieved by position to make effective contributions to the successive courses. Arrangements are now well ad- economic development of their countries. vanced for the second and third courses. The second The Bank made available two of its staff members, will begin in October 1956 and end in the following Mr. John H. Adler and Mr. William Diamond, to March. It is expected to have about 20 participants, serve full-time with the Institute under the first most of whom have already been selected. Mr. K. S. Director, Professor A. K. Cairncross of Glasgow Krishnaswamy, formerly of the Reserve Bank of India, University; the Bank also provided speakers from its will be added to the staff of the Institute for this staff and documents illustrating the experience gained course. Those who will conduct seminars will include in its own operations. Apart from the full-time Professor Jan Tinbergen of the Netherlands Economic members, the staff of the Institute was supplemented University, and Mr. Javier Marquez, Director of the by Professor Ragnar Nurkse of Columbia University Center for Latin American Monetary Studies. Economic Development Institute . This new economic staff seminars, to studv problems of economic development. The college opened its first course on January 9, 1956. Fourteen second six months course begins in October, wiith about senior officials from as many countries participated in its twentyselectedparticipantsfrom theless developedcountries. .26. INTERN ATiAONA F IANCE COR PORATION3 The International Finance Corporation came into the Corporation was held on July 24, 1956. At this being shortly after the end of the fiscal year, as an meeting by-laws and rules of procedure were adopted. affiliate of the Bank. Mr. Robert L. Garner, who had served as Vice- The Articles of Agreement of the Corporation President of the Bank since 1947, was appointed required that a minimum of 30 countries, with capital President of the Corporation. Mr. J. G. Beevor, subscriptions totaling at least $75 million, should formerly Managing Director of the Commonwealth accept membership of the Corporation to bring it into Development Finance Company Limited of London, being. These requirements were met on July 20, 1956, is Vice-President. when the number of member countries reached thirty- The purpose of the Corporation is to promote the one, with capital subscriptions totaling $78,366,000. growth of productive private enterprise, particularly The member countries up to that date included in the less-developed countries. It will seek to do so thirteen in Latin America, eight in Europe, seven in by investing its own funds in association with private Asia and the Middle East, and three in other regions. capital where this is not available in sufficient quantity The largest stockholders are the United States and and on reasonable terms; by acting as a clearing house the United Kingdom, whose subscriptions aggregate in bringing together investment opportunities and almost $50 million of the $100 million authorized private capital, whether foreign or domestic; and by capital of the Corporation. helping to enlist managerial skill and experience where The inaugural meeting of the Board of Directors of these are not already available for a project. MEMBERSHIP, SU3SCRIPTIONS AND STA;F Afghanistan, with a capital subscription of $10 Nations, the Organization of American States, the million, joined the Bank in July 1955, and Korea, O.E.E.C., the Colombo Plan Organization and other with a subscription of $12.5 million, joined in Au- bodies. gust. This brought the membership of the Bank to The principal officers of the Bank remained un- 58, and its subscribed capital to $9,050.5 million. changed up to the end of the fiscal year. On July 24, Following the arrangement made in 1954, China 1956, however, following the appointment of Mr. paid $70,000 in May 1956 on account of the unpaid Robert L. Garner as President of the new Inter- portion of its capital subscription, and furnished national Finance Corporation, extensive changes were economic data relating to its capacity to pay the made in the Bank's officers. balance remaining due. Three new Vice-Presidents were promoted from the The Bank's staff increased to 511, compared with staff of the Bank. They are Mr. W. A. B. Iliff, formerly 483 last year. At the end of the year nationals of 37 Assistant to the President, Mr. J. Burke Knapp, countries were serving on the regular staff. Although formerly Director of Operations for the Western there had been changes in the countries from which Hemisphere, and Mr. Davidson Sommers, who staff members were drawn, the number of countries remains the Bank's General Counsel. The vacancies had remained unchanged over the year. In addition, created by these appointments were also filled by 36 consultants from 14 countries had been engaged staff members, and included new Directors of the for special short-term assignments. During the year Legal Department and of the Department of Opera- staff members attended meetings of other international tions, Western Hemisphere. agencies concerned with development work, including A list of the officers of the Bank, including the new various organs and Specialized Agencies of the United appointments, is given in Appendix M. *27- Interest rate Loan Date of Original (includin, Borrower and guarantor, number Program or project loan agreement maturities commissio AUSTRALIA 29 AU Equipment for development . . . . . Aug. 22, 1950 1955-1975 41/4 % 66 AU Equipment for development . . . . . July 8, 1952 1957-1972 434% 96 AU Equipment for development . . . . . Mar. 2, 1954 1957-1969 43/4%X/ 111 AU Equipment for development. . . . . Mar. 18, 1955 1958-1970 45/s% TOTA AUSTRIA (Guarantor) Verbundgesellschaft, Draukraftwerke 102 AUA Electric power development . . . . . July 19, 1954 1959-1979 4¾34% Vorarlberger Illwerke 118 AUA Electric power development . . . . . June 14, 1955 1960-1979 43/4 % TOTA BELGIUM 14 BE Equipment for steel and power industries . Mar. 1, 1949 1953-1969 41/4¼% 48 BE Belgian Congo Development Plan . . . Sept. 13, 1951 1957-1976 4'/c% 107 BE Waterways and port improvements . . Dec. 14, 1954 1965-1969 4 Y8 % BELGIUM (Guarantor) Belgian Congo 47 BE Belgian Congo Development Plan . . . Sept. 13, 1951 1957-1976 41/2 % TOTAj BRAZIL 65 BR Railway rehabilitation . . . . . . June 27, 1952 1955-1967 4Y8 % 75 BR Highway maintenance and improvement . Apr. 30, 1953 1954-1959 41/4% 92 BR Railway rehabilitation . . . . . . Dec. 18, 1953 1959-1969 4 7% BRAZIL (Guarantor) Brazilian Traction (1st Installment) 11 BR Electric power & telephones. . . . . Jan. 27, 1949 1953-1974 4'/2% Brazilian Traction (2nd Installment) 11-BR-S Electric power development . . . . . Jan. 18, 1951 1955-1976 41/4% Brazilian Traction 95 BR Electric power development . . . . . Feb. 24, 1954 1955-1974 47/8% Sao Francisco Hidro Elet. Co. 25 BR Electric power development . . . . . May 26, 1950 1954-1975 414% Coom. Estadual Energia Eletrica 64 BR Electric power development . . . . . June 27, 1952 1957-1977 43/4% CEARG & CEMIG 76 BR Electric power development . . . . . July 17, 1953 1957-1973 5%, Usinas Eletrica Paranapanema 93 BR Electric power development . . . . . Dec. 18, 1953 1958-1974 5%, TOTAI BURMA 139 BA Railway development . . . . . . May 4, 1956 1959-1971 43/4¾% BURMA (Guarantor) Rangoon Port Commissioners 140 BA Port development . . . . . . . . May 4, 1956 1960-1976 43/4% TOTAf CEYLON 101 CE Electric power development . . . . July 9, 1954 1959-1979 43/4% CHILE (Guarantor) Fomento and Endesa 5 CH Electric power development . . . . . Mar. 25, 1948 1953-1968 41/2% Fomento 6 CH Agricultural development . . . . . Mar. 25, 1948 1950-1955 33/4% Fomento 49 CH Exploration for and use of water . . . Oct. 10, 1951 1955-1961 434/% Fomento & Papeles y Cartones 83 CH Construction of paper and pulp mills Sept. 10, 1953 1958-1970 5% TOTAL COLOMBIA 43 CO Highway construction and rehabilitation Apr. 10, 1951 1954-1961 37/8% 84 CO Highway construction and rehabilitation Sept. 10, 1953 1956-1963 43/4% 68 CO National railways project . . . . . Aug. 26, 1952 1957-1978 43/4% 144 CO Highway construction and rehabilitation . June 6, 1956 1959-1971 43/4 % *28- EXPRESSED IN UNITED STATES CURRENCY Effective loans sold Effective Undisbursed Original Loans Cancellations Principal or agreed to be sold, loans Principal balance of principal not yet anid repavments held by amount effective amount effective2 refandings to Bank Total sales Portion mnatured4 Bank disbursed loans S 100,000,000 $ - $ - $ 115,000 $ 8,394,000 $ 3,024,000 $ 91,491,000 $ 100,000,000 $ - 50,000,000 - - - 3,800,000 - 46,200,000 50,000,000 - 54,000,000 - - - 2,250,000 - 51,750,000 54,000,000 - 54,500,000 - - - 10,400,000 - 44,100,000 43,009,482 11,490,518 258,500,000 - - 115,000 24,844,000 3,024,000 233,541,000 247,009,482 11,490,518 12,000,000 - - - - 12,000,000 5,654,106 6,345,894 10,000,000 - - - 153,000 - 9,847,000 5,799,468 4,200,532 22,000,000 - - - 153,000 - 21,847,000 11,453,574 10,546,426 16,000,000 - - - 16,000,000 3,500,000 - 16,000,000 - 30,000,000 - - - 5,410,000 - 24,590,000 30,000,000 - 20,000,000 - - - - - 20,000,000 12,145,616 7,854,384 40,000,000 - - - 4,786,234 - 35,213,766 40,000,000 - 106,000,000 - - 26,196,234 3,500,000 79,803,766 98,145,616 7,854,384 12,500,000 - - 818,000 - - 11,682,000 9,410,123 3,089,877 3,000,000 - - 1,200,000 - - 1,800,000 2,981,024 18,976 12,500,000 - - - - - 12,500,000 8,565,771 3,934,229 75,000,000 - - 1,164,467 4,028,411 1,835,533 69,807,122 75,000,000 - 15,000,000 - - 200,000 - - 14,800,000 15,000,000 - 18,790,000 - - 1,000,000 - - 17,790,000 18,790,000 - 15,000,000 - - 954,905 - - 14,045,095 14,867,032 132,968 25,000,000 _ - - - - 25,000,000 - 25,000,000 7,300,000 - - - 1,047,000 - 6,253,000 6,895,705 404,295 10,000,000 - - - - - 10,000,000 4,386,130 5,613,870 194,090,000 - - 5,337,372 5,075,411 1,835,533 183,677,217 155,895,785 38,194,215 5,350,000 5,350,000 - - - _ _ _ 14,000,000 14,000,000 - - - 19,350,000 19,350,000 - - - _ 19,110,000 - - - 19,110,000 3,561,424 15,548,576 13,500,000 - - 2,079,000 82,000 - 11,339,000 13,500,000 - 2,500,000 - - 755,000 1,745,000 1,745,000 - 2,500,000 - 1,300,000 - 445,544 80,000 633,000 166,000 141,456 854,456 - 20,000,000 - - - - - 20,000,000 6,698,355 13,301,645 37,300,000 - 445,544 2,914,000 2,460,000 1,911,000 31,480,456 23,552,811 13,301,645 16,500,000 - - 3,471,000 800,000 800,000 12,229,000 16,500,000 - 14,350,000 - - 748,000 - - 13,602,000 12,464,383 1,885,617 25,000,000 - - - - - 25,000,000 11,095,338 13,904,662 16,500,000 16,500,000 - - - - - - *29- STATEMENT OF LOANS (continued) Inlter-est role Loan Date of Originial . (inclluding Borrower and gutarantorl 17umber Program or project loan agreement mnaturities commnissio, COLOMBIA (Guarantor) Caja de Credito 18 CO Agricultural development . . . . . Aug. 19, 1949 1952-1956 31/2% Caja de Credito 108 CO Agricultural development . . . . . Dec. 29, 1954 1957-1961 4¼1/4 CHIDRAL 38 CO Electric power development . . . . . Nov. 2, 1950 1954-1970 4%, CHIDRAL 113 CO Electric power development . . . . . Mar. 24, 1955 1959-1975 43/4% Caldas Hidro-Elec. Co. 39 CO Electric power development . . . . . Dec. 28, 1950 1952-1971 4% Hidroelectrica del Rio Lebrija 54 CO Electric power development . . . . . Nov. 13, 1951 1954-1972 41/2% F. F. C. C. 119 CO National railways project . . . . . June 15, 1955 1958-1980 43/4%67 TOTAl DENMARK 3 DE Post-war reconstruction . . . . . . Aug. 22, 1947 1953-1972 41¼4% ECUADOR (Guarantor) Com. Ejec. Vialidad (Guayas) 94 EC Highway construction . . . . . . Feb. 10, 1954 1958-1964 45Y% Empresa Electrica Quito, S. A. 137 EC Electric power development . . . . . Mar. 29, 1956 1959-1976 43/4% TOTA EL SALVADOR 104 ES Coastal highway project . . . . . . Oct. 12, 1954 1959-1966 41/2% EL SALVADOR (Guarantor) Comision del Rio Lempa 22 ES Electric power development . . . . . Dec. 14, 1949 1954-1975 414% TOTAL ETHIOPIA 31 ET Highway rehabilitation . . . . . . Sept. 13, 1950 1956-1971 4% 32 ET Foreign exchange for Development Bank . Sept. 13, 1950 1956-1971 4% 42 ET Telecommunications . . . . . . . Feb. 19, 1951 1956-1971 4% TOTA' FINLAND 21 Fl Equipment for timber production . . . Oct. 17, 1949 1950-1951 3% FINLAND (Guarantor) Bank of Finland 16 FL Power, wood processing and limestone Aug. 1, 1949 1953-1964 4% Bank of Finland 61 FI Power, wood processing and agriculture Apr. 30, 1952 1955-1970 43/¾% Bank of Finland 70 Fl Wood processing . . . . . . . . Nov. 13, 1952 1955-1970 43/4% / Bank of Finland 112 FL Power and wood processing . . . . . Mar. 24, 1955 1958-1970 45/8 % Mortgage Bank of Finland Oy 142 Fl Electric power development . . . . . May 22, 1956 1959-1976 43/4 % TOTA1 FRANCE (Guarantor) Credit National I FR Post-war reconstruction . . . . . . May 9, 1947 1952-1977 41/4% Overseas Railways Administration 100 FR Railway improvement . . . . . . June 10, 1954 1956-1966 41/2% Electricite et Gaz d'Algerie 131 FR Electric power development . . . . . Aug. 26, 1955 1957-1975 43/4% TOTAl GUATEMALA 124 GU Highway construction and maintenance . July 29, 1955 1959-1970 45Ys% HAITI 141 HA Highway maintenance . . . . . . May 7, 1956 1959-1967 41/2% HONDURAS 135 HO Highway maintenance . . . . . . Dec. 22, 1955 1957-1964 4%/2 ICELAND 46 IC Electric power development . . . . . June 20, 1951 1956-1973 43/8g 53 IC Agricultural development . . . . . Nov. 1, 1951 1956-1973 41/2% 69 IC Fertilizer plant. . . . . . . . . Aug. 26, 1952 1954-1969 43/4% ICELAND (Guarantor) Iceland Bank of Development 79 IC Agricultural development . . . . . Sept. 4, 1953 1958-1975 5% Iceland Bank of Development 80 IC Construction of radio transmitter building. Sept. 4, 1953 1954-1966 43/4 % TOTAI *30- EXPRESSED IN UNITED STATES CURRENCY Effective loatns sold Effective Undisbiursed Originial Loans Cancellations Principal or agreed to be sold' loans Principal balanzce of principal not yet ant/ repayments held by amount effective amount effective2 refundings to Bank Total sales Portion matured, Bank disbursed loans $ 5,000,000 S - $ 74,559 $ 2,500,000 $ 2,000,000 $ 2,000,000 $ 425,441 $ 4,925,441 $ - 5,000,000 - - - 3,000,000 - 2,000,000 5,000,000 - 3,530,000 - - 234,000 148,000 148,000 3,148,000 3,530,000 - 4,500,000 - - - - - 4,500,000 1,737,752 2,762,248 2,600,000 - - 202,000 194,000 194,000 2,204,000 2,600,000 - 2,400,000 - - 135,200 84,800 84,800 2,180,000 2,400,000 - 15,900,000 - - - 866,000 - 15,034,000 - 15,900,000 111,280,000 16,500,000 74,559 7,290,200 7,092,800 3,226,800 80,322,441 60,252,914 34,452,527 40,000,000 - - 599,000 2,821,000 1,586,000 36,580,000 40,000,000 - 8,500,000 - - - - 8,500,000 1,917,997 6,582,003 5,000,000 5,000,000 -Note 3 - - 13,500,000 5,000,000 - = - - 8,500,000 1,917,997 6,582,003 11,100,000 - - 250,000 - 10,850,000 3,819,740 7,280,260 12,545,000 - - 25,000 1,000,000 420,000 11,520,000 12,545,000 - 23,645,000 25,000 1,250,000 420,000 22,370,000 16,364,740 7,280,260 5,000,000 - 118,000 - - 4,882,000 5,000,000 - 2,000.000 - - 47,000 - - 1,953,000 1,420,837 579,163 1,500,000 - 35,000 - 1,465,000 1,093,980 406,020 8,500,000 - 200,000 - - 8,300,000 7,514,817 985,183 2,300,000 - 197,869 2,102.131 - - - 2,102,131 - 12,500,000 - - 1,967,990 1,559,010 1,559,010 8,973,000 12,500,000 - 20,000,000 - - 2,436,000 - - 17,564,000 19,676,993 323,007 3,479,464 - - 163,535 - - 3,315,929 2,940,949 538,515 12,000,000 - - - 2,288,000 - 9,712,000 6,565,732 5,434,268 15,000,000 15,000,000 - - Note3 - - 65,279,464 15,000,000 197,869 6,669,656 3,847,010 1,559,010 39,564,929 43,785,805 6,295,790 250,000,000 - - 38,000 30,342,000 11,555,000 219,620,000 250,000,000 - 7,500,000 - - - 609,000 - 6,891,000 5,880,243 1,619,757 10,000,000 - - 724,000 - 9,276,000 6,419,530 3,580,470 267,500,000 - 38,000 31,675,000 11,555,000 235,787,000 262,299,773 5,200,227 18,200,000 - - 576,000 - 17,624,000 4,840,342 13,359,658 2,600,000 2,600,000 - - Note3 - - 4,200,000 - - - 872,000 3,328,000 70,489 4,129,511 2,450,000 - - 47,600 - - 2,402,400 2,450,000 - 1,008,000 - - - - - 1,008,000 1,008,000 - 854,000 - - 82,000 - - 772,000 854,000 - 1,350,000 - - _ - _ 1,350,000 1,350,000 - 252,000 - - 32,760 - - 219,240 252,000 - 5,914,000 - - 162,360 - - 5,751,640 5,914,000 - -31. STATEMENT OF LOANS (continued) Inlerest Irate Loan Date of Original - (ilncluding Borrower and gtarantor1 numllnber- Progranm or project loan agreement maturities commissioni INDIA 17 IN Railway rehabilitation . . . . . . Aug. 18, 1949 1950-1964 4%. 19 IN Agricultural development . . . . . Sept. 29, 1949 1952-1956 33/2,% 23 IN Electric power development . . . . . Apr. 18, 1950 1955-1970 4%o 72 IN Damodar multi-purpose project . Jan. 23, 1953 1956-1977 47/8 % INDIA (Guarantor) Indian Iron & Steel Company 71 IN Iron and steel expansion . . . . . . Dec. 18, 1952 1959-1967 43/4% Tata Group of Hydro Companies 106 IN Electric power development . . . . . Nov. 19, 1954 1958-1974 43/4 % I. C. I. C. 1. 109 IN Development of private industry . . . Mar. 14, 1955 1960-1969 45/80G The Tata Iron and Steel Co., Ltd. 146 IN Expansion of steel production facilities. June 26, 1956 1959-1971 43/4% TOTAL IRAQ 26 IRQ Construction of a flood control project . June 15, 1950 1956-1965 33/4% ITALY (Guarantor) Cassa per I1 Mezzogiorno 50 IT Development Plan for Southern Italy . . Oct. 10, 1951 1956-1976 41/2 % Cassa per I] Mezzogiorno 88 IT Development Plan for Southern Italy . . Oct. 6, 1953 1958-1978 5% Cassa per Il Mezzogiorno 117 IT Power, irrigation and industrial projects . June 1, 1955 1958-1975 43/4% TOTAL JAPAN (Guarantor) Japan Development Bank 89 JA Electric power development . . . . . Oct. 15, 1953 1957-1973 5% Japan Development Bank 90 JA Electric power development . . . . . Oct. 15, 1953 1957-1973 5% Japan Development Bank 91 JA Electric power development . . . . . Oct. 15, 1953 1957-1973 5% Japan Development Bank 133 JA Construction of steel plate mill . . . . Oct. 25, 1955 1958-1970 45/s% Japan Development Bank 136 JA Industrial projects . . . . . . . Feb. 21, 1956 1958-1971 43/4 % TOTAL LEBANON (Guiarantor) Litani River Authority 129 LE Electric power development; irrigation . Aug. 25, 1955 1961-1980 434% LUXEMBOURG 4 LU Steel mill and railroads . . . . . . Aug. 28, 1947 1949-1972 41/4¼0% MEXICO (Guarantor) Financiera and Comision 12 ME Electric power development . . . . . Jan. 6, 1949 1953-1973 41Y2% Financiera and Comision 13 ME Electric power development . . . . . Jan. 6, 1949 July 1, 1950 41/2%o Mexlight 24 ME Electric power development . . . . . Apr. 28, 1950 1953-1975 41/2% Bank Consortium & Financiera 33 ME Development of small industrial projects . Oct. 18, 1950 1952-1957 31/2% Financiera and Comision 56 ME Electric power development . . . . . Jan. 11, 1952 1955-1977 41/2½%/ Ferrocarril Del Pacifico 103 ME Railway rehabilitation . . . . . . Aug. 24, 1954 1959-1969 45/8%. TOTAL NETHERLANDS 2 NE Post-war reconstruction . . . . . . Aug. 7, 1947 1954-1972 4¼%4 2a NE Post-war reconstruction . . . . . . May 25, 1948 1953-1954 4¼'h % NETHERLANDS (Guarantor) Stoomvaart Mij. "Nederland" 7, 7a NE Purchase of S.S. Raki and S.S. Roebiah . July 15, 1948 1949-1958 3-9/16% Vereenigde Schvrt. Mij. 8 NE Purchase of S.S. Almkerk . . . . . July 15, 1948 1949-1958 3-9/16% Holland-Amerika Lijn 9 NE Purchase of S.S. Alblasserdijk . . . . July 15, 1948 1949-1958 3-9/16% Rotterdamsche Lloyd 10, 10a NE Purchase of S.S. Friesland and S.S. Drente . July 15, 1948 1949-1958 3-9/16% Herstelbank 15 NE Post-war industrial reconstruction . . . July 26, 1949 1952-1964 4% KLM Royal Dutch Airlines 59 NE Purchase of aircraft . . . . . . . Mar. 20, 1952 1954-1958 41/8 % TOTAL *32- EXPRESSED IN UNITED STATES CURRENCY Effective loans sold Effective Undisbursed Original Loans Cancellations Prinzcipal or agreed to be sold3 loans Principa balance of priicipal niot vet and repayments lleld by amount effective amount effective2 refundings to Bank Total sales Portioni matvured4 Batik disbursed loans S 34,000,000 $ - $ 1,200,000 $ 5,775,816 $ 11,646,536 $ 5,564,302 $ 15,377,648 $ 32,800,000 $ - 10,000,000 - 2,796,187 2,263,000 4,940,813 4,350,000 - 7,203,813 - 18,500,000 - 1,779,500 958,000 2,427,000 315,000 13,335,500 16,720,500 - 19,500,000 - 9,000,000 - - - 10,500,000 6,066,280 4,433,720 31,500,000 - - - - 31,500,000 8,245,297 23,254,703 16,200,000 - - - 1,364,000 - 14,836,000 6,460,950 9,739,050 10,000,000 - - - - - 10,000,000 - 10,000,000 75,000,000 75,000,000 - - Note3 - - - 214,700,000 75,000,000 14,775,687 8,996,816 20,378,349 10,229,302 95,549,148 77,496,840 47,427,473 12,800,000 - 6,506,054 6,293,946 - - - 6,293,946 - 10,000,000 - - - 251,000 - 9,749,000 10,000,000 - 10,000,000 - - - - - 10,000,000 10,000,000 - 70,000,000 10,144,000 - - 6,000,000 - 53,856,000 20,790,969 39,065,031 90,000,000 10,144,000 - - 6,251,000 - 73,605,000 40,790,969 39,065,031 21,500,000 - - - 3,244,288 - 18,255,712 19,717,953 1,782,047 11,200,000 - 510,000 - 1,653,591 - 9,036,409 10,284,979 405,021 7,500,000 - - - 1,245,000 - 6,255,000 6,321,723 1,178,277 5,300,000 - 100,000 - 791,000 - 4,409,000 1,509,105 3,690,895 8,100,000 - - - 1,076,000 - 7,024,000 950,573 7,149,427 53,600,000 - 610.000 - 8,009,879 - 44,980,121 38,784,333 14,205,667 27,000,000 - - - - - 27,000,000 - 27,000,000 12,000,000 - 238,017 382,983 2,704,000 1,722,000 8,675,000 11,761,983 - 24,100,000 - - 1,766,700 3,968,300 1,135,300 18,365,000 24,100,000 - 10,000,000 - 10,000,000 (Refunding) - - - - - 26,000,000 - - 1,629,000 756,000 606,000 23,615,000 26,000,000 - 10,000,000 - 9,472,112 442,398 - - 85,490 527,888 - 29,700,000 - - 235,000 2,868,000 200,000 26,597,000 22,633,392 7,066,608 61,000,000 - - - 3,976,000 - 57,024,000 40,000,713 20,999,287 160,800,000 - 19,472,112 4,073,098 11,568,300 1,941,300 125,686,490 113,261,993 28,065,895 191,044,212 - - 103,289,212 25,845,000 7,186,000 61,910,000 191,044,212 - 3,955,788 - - - 3,955,788 3,955,788 - 3,955,788 - 4,000,000 - - - 4,000,000 4,000,000 - 4,000,000 - 2,000,000 - - - 2,000,000 2,000,000 - 2,000,000 - 2,000,000 - - - 2,000,000 2,000,000 - 2,000,000 - 4,000,000 - - - 4,000,000 4,000,000 - 4,000,000 - 15,000,000 - 7,548,015 777,589 3,534,411 2,797,411 3,139,985 7,451,985 - 7,000,000 - - 3,500,000 3,500,000 3,500,000 - 7,000,000 - 229,000,000 - 7,548,015 107,566,801 48,835,199 29,439,199 65,049,985 221,451,985 - .33. STATEMENT OF LOANS (continued) Interest Loan Date of Original - (including Borrower and guarantor' iumber Program or project loan agreement maturities comtnission) NICARAGUA 45 NI Highway construction . . . . . . June 7, 1951 1954-1961 41/8% 52 NI Construction of grain storage facilities . . Oct. 29, 1951 1954-1962 4 ' 81 NI Highway construction . . . . . . Sept. 4, 1953 1957-1963 43/4% 82 NI Electric power development . . . Sept. 4, 1953 1955-1963 43/4% NICARAGUA (Guarantor) Banco Nacional de Nicaragua 44 NI Agricultural development . . . June 7, 1951 1954-1958 4%So Emp. Nal. Luz y Fuerza 121 NI Electric power development . . . . . July 8, 1955 1958-1975 43/4% Instituto de Fomento Nacional 122 NI Electric power development . . . . . July 8, 1955 1958-1975 43/4%6o Instituto de Fomento Nacional 130 NI Agricultural development . . . . . Aug. 26, 1955 1957-1967 41/4¼%0 Autoridad Portuario de Corinto 143 NI Port construction and development May 22, 1956 1959-1976 43/4%O TOTAL NORWAY 97 NO General development . . . . . . Apr. 8, 1954 1957-1974 43/4% 115 NO General development . . . . . . Apr. 19, 1955 1960-1975 43/4% 138 NO Electric power development . . . . . May 3, 1956 1961-1976 43/40 TOTAL PAKISTAN 60 PAK Railway rehabilitation . . . . . . Mar. 27, 1952 1954-1967 4 /Y8 62 PAK Agricultural development . . . . . June 13, 1952 1954-1959 41/s% PAKISTAN (Guarantor) Sui Gas Transmission Co. 99 PAK Natural gas pipeline . . . . . . . June 2, 1954 1956-1974 4¾3/4 Karachi Electric Supply Corp. 120 PAK Electric power development . . . . . June 20, 1955 1957-1970 45/8% Karnaphuli Paper Mills, Ltd. 125 PAK Construction of paper and pulp mill . . Aug. 4, 1955 1956-1970 45Y8s% Trustees of the Port of Karachi 126 PAK Port construction and development . . Aug. 4, 1955 1960-1980 43/4% TOTAL PANAMA 123 PAN Highway rehabilitation . . . . . . July 12, 1955 1959-1964 4114% PANAMA (Guarantor) Instituto de Fomento Economico 86 PAN Agricultural development . . . . . Sept. 25, 1953 1955-1960 45/Ys% Instituto de Fomento Economico 87 PAN Construction of grain storage facilities . . Sept. 25, 1953 1955-1961 4 /s % TOTAL PARAGUAY 55 PA Agricultural development . . . . . Dec. 7, 1951 1954-1960 43/8% PERU 57 PE Port development . . . . . . . . Jan. 23, 1952 1954-1967 41/2% 67 PE Agricultural development . . . . . July 8, 1952 1954-1959 4148% 98 PE Agricultural development . . . . . Apr. 12, 1954 1956-1961 41/4% 114 PE Irrigation project . . . . . . . . Apr. 5, 1955 1959-1980 43/4% 127 PE Highway maintenance . . . . . . Aug. 5, 1955 1958-1964 41/4 % PERU (Guarantor) Banco de Fomento Agropecuario 105 PE Agricultural development . . . . . Nov. 12, 1954 1957-1963 41/4% Cemento Pacasmayo 116 PE Construction of cement plant . . . . Apr. 19, 1955 1958-1970 45Y% TOTAL SOUTH AFRICA 40 SA Expansion of transport facilities. . . . Jan. 23, 1951 1956-1965 33/4% 77 SA Expansion of transport facilities. . . . Aug. 28, 1953 1955-1963 43/4% 134 SA Expansion of transport facilities. . . . Nov. 28, 1955 1958-1966 41/2% SOUTH AFRICA (Guarantor) Electricity Supply Commission 41 SA Electric power development . . . . . Jan. 23, 1951 1954-1970 4% Electricity Supply Commission 78 SA Electric power development . . . . . Aug. 28, 1953 1955-1963 43/4% TOTAL .34- EXPRESSED IN UNITED STATES CURRENCY Effective loans sold Effective Undisbiirsed Original Loans Cancellations Principal or agreed to be sold' loans Principal balaunce of principal not yef and repayments held by amount effective amount effective2 refundings to Bank Total sales Portion mnatured4 Bank disbursed loans $ 3,500,000 $ - $ - $ 764,000 $ 29,000 $ 29,000 $ 2,707,000 $ 2,804,049 $ 695,951 550,000 - 3,006 88,994 29,000 29,000 429,000 546,994 - 3,500,000 - - - - 3,500,000 1,959,378 1,540,622 450,000 - - 62,000 - - 388,000 450,000 - 1,200,000 - 6,879 756,121 29,000 29,000 408.000 1,193.121 - 7,100,000 - - - 724,000 - 6,376,000 883,489 6,216,511 400,000 - - - - - 400,000 1,710 398,290 1,500,000 - - - 735,000 - 765,000 216,306 1,283,694 3,200,000 3,200,000 - - Note3 - - - 21,400,000 3,200,000 9,885 1,671,115 1,546,000 87,000 14,973,000 8,055,047 10,135,068 25,000,000 - - - 2,016,000 - 22,984,000 25,000,000 25,000,000 - - - 2 - 25,000,000 25,000,000 - 25,000,000 - - - - 25,000,000 - 25,000,000 75,000,000 - - - 2,016,000 - 72,984,000 50,000,000 25,000,000 27,200,000 - - 2,473,400 935,600 735,600 23,791,000 15,589,815 11,610,185 3,250,000 - - 262,000 997,000 997,000 1,991,000 2,848,182 401,818 14,000,000 - - - 1,806,000 - 12,194,000 14,000,000 - 13,800,000 - - - 2,049,600 - 11,750,400 9,606,565 4,193,435 4,200,000 - - - 775,000 - 3,425,000 4,200,000 - 14,800,000 - - - 216,842 - 14,583,158 1,398,362 13,401,638 77,250,000 - 2,735,400 6,780,042 1,732,600 67,734,558 47,642,924 29,607,076 5,900,000 - - - 1,700,000 - 4,200,000 1,489,288 4,410,712 1,200,000 - 542,574 164,000 - - 493,426 407,426 250,000 290,000 - 43,000 - - 247,000 290,000 - 7,390,000 - 542,574 207,000 1,700,000 - 4,940,426 2,186,714 4,660,712 5,000,000 - - 400,000 100,000 100,000 4,500,000 2,680,361 2,319,639 2,500,000 - - 146,000 605,000 211,000 1,749,000 2,246,812 253,188 1,300,000 - - 275,250 439,250 163,750 585,500 1,300,000 - 1,700,000 - - - 392,000 - 1,308,000 1,619,741 80,259 18,000,000 - - - 496,000 - 17,504,000 7,308,997 10,691,003 5,000,000 - - - 683,000 - 4,317,000 1,578,852 3,421,148 5,000,000 - - - 748,000 - 4,252,000 1,732,624 3,267,376 2,500,000 - - - 310,000 - 2,190,000 1,157,748 1,342,252 36,000,000 - - 421,250 3,673,250 374,750 31,905,500 16,944,774 19,055,226 20,000,000 - - 66,000 1,867,000 934,000 18,067,000 20,000,000 - 30,000,000 - - 328,000 7,404,000 3,202,000 22,268,000 30,000,000 - 25,200,000 - - - - - 25,200,000 2,827,837 22,372,163 30,000,000 - - 15,675 5,450,560 3,234,560 24,533,765 30,000,000 - 30,000,000 - - - 10,793,000 2,942,000 19,207,000 30,000,000 - 135,200,000 - - 409,675 25,514,560 10,312,560 109,275,765 112,827,837 22,372,163 .35. STATEMENT OF LOANS (continued) Interest rate Loan Date of Original r(ialding Borrower and guarantor' number Program or project loan agreement matiurities commission) THAILAND 35 TH Railway rehabilitation . . . . . . Oct. 27, 1950 1954-1966 3y/4 % 36 TH Irrigation project . . . . . . . . Oct. 27, 1950 1956-1971 4% 37 TH Port construction and development Oct. 27, 1950 1954-1966 33/4 % THAILAND (Guarantor) State Railway of Thailand 128 TH Railway rehabilitation . . . . . . Aug. 9, 1955 1958-1970 4Ys/% TOTAL TURKEY 27 TU Construction of grain storage facilities . . July 7, 1950 1954-1968 37 %8 28 TU Port construction and development . . July 7, 1950 1956-1975 41/4¼% 28 TU-S Port construction and development . . Feb. 26, 1954 1956-1975 4 /8% 63 TU Seyhan Dam multi-purpose project . . June 18, 1952 1957-1977 43/4% TURKEY (Guarantor) Industrial Development Bank 34 TU Development of private industry . . . Oct. 19, 1950 1957-1965 33/4%7o Industrial Development Bank 85 TU Development of private industry . . . Sept. 10, 1953 1958-1968 4 /V8 TOTAL UNITED KINGDOM (Guarantor) Southern Rhodesia 58 SR Electric power development . . . . . Feb. 27, 1952 1956-1977 43/4%70 Northern Rhodesia 74 NR Railway development . . . . . . Mar. 11, 1953 1956-1972 4¾3/4%, East Africa High Commission 110 EA Railways and harbors . . . . . . Mar. 15, 1955 1958-1974 43/4% Federal Power Board- Rhodesia and Nyasaland 145 RN Electric power development . . . . . June 21, 1956 1963-1981 5%70 TOTAL URUGUAY (Guarantor) U. T. E. 30 UR Power and telephone development . . . Aug. 25, 1950 1955-1974 41/4c¼o U. T. E. 132 UR Electric power development . . . . . Aug. 29, 1955 1958-1975 43/4%0 TOTAL YUGOSLAVIA 20 YU Equipment for timber production . . . Oct. 17, 1949 1950-1951 3% 51 YU' Power, mining, transport, industrial, Oct. 11, 1951 1955-1976 4 1/2 O 73 YUJ agricultural and forestry projects . . Feb. 11, 1953 1956-1978 47/ s TOTAL GRAND TOTALS NOTES: I Loans made (a) to the member or (b) to a political subdivision or a public or private enterprise in the territories oJf the member with the member's guarantee. 2 Agreements providing for these loans have been signed, but the loans do not become effective and disbursements thereunder do not start until the borrower and guarantor, if any, take certain action and furnish certain documents to the Bank. 3 The Bank has entered into agreements to sell the below listed portions of loans which are not yet effective: Loan Principal amount agreed to be sold 137EC ... $197,000 141 HA .... 413,000 142FI ... 280,000 143 NI ... 121,000 145 RN ... . 5,000,000 146 IN.2,355,000 Total $8,366,000 *36 EXPRESSED IN UNITED STATES CURRENCY Effective loans sold Effective Undisbursed Original Loans Cancellations Principal or agreed to be sold- loans Principal balance of principal not yet and repayments held br, amount effective anmountt effective2 refaundings to Bank Total sales Portion matutred' Bank disbursed loaivs $ 3,000,000 $ - $ - $ 306,000 $ 189,000 $ 189,000 S 2,505,000 $ 3,000,000 $ - 18,000,000 - - 425,000 796,000 - 16,779,000 18,000,000 4,4d0,000 - - 450,000 275,000 275,000 3,675,000 4,400,000 - 12,000,000 - - - 1,105,000 - 10,895,000 929,254 11,070,746 37,400,000 - - 1,181,000 2,365,000 464,000 33,854,000 26,329,254 11,070,746 3,900,000 - - 361,000 144,000 144,000 3,395,000 3,337,853 562,147 12,500,000 - - 201,000 - - 12,299,000 11,435,412 1,064,588 3,800,000 - - 57,000 _ _ 3,743,000 57,000 3,743,000 25,200,000 - 2,356,000 - - - 22,844,000 19,846,047 2,997,953 9,000,000 - - - - - 9,000,000 7,940,012 1,059,988 9,000,000 - - - - - 9,000,000 4,854,701 4,145,299 63,400,000 - 2,356,000 619,000 144,000 144,000 60,281,000 47,471,025 13,572,975 28,000,000 - - - 5,567,000 - 22,433,000 28,000,000 - 14,000,000 - - - 3,004,347 284,000 10,995,653 14,000,000 - 24,000,000 - - - 7,973,000 - 16,027,000 22,933,327 1,066,673 80,000,000 80,000,000 - - Note 3 - - - 146,000,000 80,000,000 - - 16,544,347 284,000 49,455,653 64,933,327 1,066,673 33,000,000 - - 2,175,000 2,150,000 300,000 28,675,000 33,000,000 - 5,500,000 - - - 654,000 - 4,846,000 1,740,640 3,759.360 38,500,000 - - 2,175,000 2,804,000 300,000 33,521,000 34,740,640 3,759,360 2,700,000 - - 2,700,000 - - - 2,700,000 - 28,000,000 - - 1,163,000 - - 26,837,000 27,434,286 565,714 30,000,000 - = - - - 30,000,000 27,287,014 2,712,986 60,700,000 - - 3,863,000 - - 56,837,000 57,421,300 3,278,700 $2,720,108,464 $ 226,794,000 $ 52,776,316 S 164,346,672 $ 267,796,381 $ 85,748,054 $2,008,395,095 S1,963,654,821 $ 476,883,327 Less exchange adjustment 6,587,648 $2,001,807,447 4 This includes amounts which, according to information available to the Bank, have been prepaid prior to maturity. .37. COU TRY-B COUi [77RY SUMMARY OF BAN~K OpERATIONS195D 1956 This Summary contains a country-by-country description of the operations of the Bank in the past fiscal year. For each country in which the Bank was active, information is given on one or more of the following topics: loans made; nego- tiations and surveys looking to possible loans; general survey missions and other kinds of advisory services. Loans that were made to borrowers other than member governments have the guarantee of the member governments concerned; the guarantee arrangements have only been mentioned in cases where there is more than one guarantor. The interest rates shown include the 1% commission which, under the Bank's Articles of Agreement, is allocated to the Bank's Special Reserve. The section on each region is accompanied by tables showing loans made. The loan amounts in the tables are expressed in United States dollars and are net of cancellations and refundings. Descriptions of the projects for which loans were made in previous fiscal years may be found in the Annual Reports covering the fiscal years during which the loans were made. *38- A F R I C A LOANS DURING FISCAL YEAR a transmission network throughout the populous coastal area of Algeria. The program will enable Couintry No. Anount -_______________ _ _- the company to keep pace with Algeria's growing Algeria 1 S 10,000,000 demand for electricity, particularly in the main urban Rhodesia & Nyasaland 1 80,000,000 South Africa 1 25,200,000 centers of population and industry, Oran, Algiers and Bone. 3 115,200,000 PARTICIPATION * $724,000 maturing 1957 through 1960, by Societe Generale pour favoriser le Developpe- TOTAL LOANS 1947-1956 ment du Commerce et de l'Industrie en France, Nederlandsche Handel-Maatschappij, N. V., and Algeria 1 10,000,000 ' Belgian Congo 1 40,000,000 Banque Lambert, Brussels. East Africa 1 24,000,000 Ethiopia 3 8,500,000 French West Africa 1 7,500,000 ETHIOPIA Rhodesia & Nyasaland 3 122,000,000 South Africa 5 135,200,000 -____ -________________________________ ETHIOPIAN DEVELOPMENT BANK Lending in Africa- During the year the Bank approved two projects 15 loans in 7 countries totaling $347,200,000 being financed by the Ethiopian Development Bank- the construction of a mosaic tile plant and of a modern bakery. The projects called for foreign exchange ALGERIA expenditures of $128,000 from the Bank's loan of $2 million, made in 1950 to provide the Development ELECTRIC POWER LOAN Bank with foreign exchange. By the end of the fiscal 0 million 20-year 43/40Gloan of August 26,1955 year, the Bank had approved projects requiring a BORROWVER * Electricite et Gaz d'Algerie total of $1.5 million from its loan. The coffee credit GUARANTORS * France and Algeria program, started by the Development Bank in 1953 PURPOSE * The execution of a five-year program for with the assistance of the International Bank, progress- the expansion of generating, transmission and dis- ed well during the year. By the end of December 1955, tribution facilities in Algeria. the Development Bank had lent about Eth.$840,000 Under the program, Electricite et Gaz d'Alg6rie will (U.S.$350,000) for the development of coffee pro- increase its production of power by about one-quarter, duction. In 1956, a modern coffee-processing plant, from about 800 million kilowatt hours in 1955 to over financed by the Development Bank, was completed one billion kilowatt hours in 1959, and will complete near Jimma, the center of an important coffee- important links in the high-voltage transmission producing area. network. The total cost of the part of the program OTHER ACTIVITIES that the Bank is helping to finance is estimated at the The Bank assisted the Imperial Board of Telecom- equivalent of $78 million. The Bank's loan is being munications in selecting a new General Manager. used to reimburse the company for part of its ex- The Board is carrying out a rehabilitation and .penditures on the program, and work has been extension program with the help of a $1.5 million proceeding on schedule. Bank loan made in February 1951. ECONOMIC BENEFITS * Since 1947, Electricite et Gaz Ethiopia has requested loans to develop the Port d'Algerie has been building new power stations and of Assab and further to improve the highway system. *39- The Bank will send missions to Ethiopia early in the of the first stage is estimated to be equivalent to about new fiscal year to study the economy of Ethiopia and £80 million ($225 million). The Bank's loan will to examine these projects. finance £28.6 million ($80 million) of this amount; the Federal Power Board will finance the remainder G 0 L D C O A S T by long-term borrowings from two British Institutions, Representatives from the Gold Coast visited the Bank the Colonial Development Corporation (£15 million), in May and again in June 1956 to inform the Bank of the Commonwealth Development Finance Co. Ltd. the results of the study that has been going on for (£3 million), and from the Government of the several years on the proposed Volta River project. Federation (up to £34 million). The Government will The project is an integrated scheme for producing obtain £28 million of its share from local borrowings: aluminum. It contemplates mining bauxite, processing copper mining companies of the Selection Trust and it to produce alumina, and then electrically smelting Anglo-American groups will lend the Federation the alumina using power generated by harnessing the £20 million; the British South Africa Company, £4 Volta River. A port and railway would be included million; and Barclays Bank D.C.O. and the Standard in the project. Bank of South Africa £2 million each. This is the Bank's largest loan in Africa and the largest it has ever made for a single project. The loan will be made in RHODESIA AND NYASALAND United States dollars, pounds sterling and various other European currencies. ELECTRIC POWER LOAN ECONOMIC BENEFITS * The Federation came into $80 million 25-year 5% loan of June 21, 1956 existence nearly three years ago and comprises BORROWER * Federal Power Board, a public corpora- Northern Rhodesia, Southern Rhodesia and Nyasa- tion set up in 1956 and responsible for building and land. Economic growth in the area has been unusually operating the Kariba power project. rapid in recent years; real output has increased at the GUARANTORS * The United Kingdom and the Fed- rate of 10%c annually-one of the fastest in the world. eration of Rhodesia and Nyasaland The upsurge of private economic activity has put an PURPOSE * The execution of the Kariba hydroelectric increasing strain on basic services, particularly trans- power scheme, which will ultimately generate and portation and electric power. Mining and industry transmit 1,200,000 kilowatts of power to consuming now consume 771% of the power produced in the centers throughout the Federation. Federation, and an expanding power supply is The loan is helping to finance the first stage of the essential to their continued growth. It is estimated scheme; this includes the construction of an arch dam that the power demand in the Federation will require at Kariba Gorge on the Zambezi River, one power- the addition of about 600,000 kilowatts by 1965 and house with five generating units having a total about 1,100,000 kilowatts by 1972. In the past, capacity of 500,000 kilowatts, and nearly 1,000 miles demands for power have been met by adding to of transmission lines to the copper belt in Northern thermal electric capacity. Because of the greatly in- Rhodesia and the principal cities of Southern Rho- creasing demand for power, the Government decided desia. The Federal Power Board has retained an to turn to the development of hydroelectric power international group of engineers to plan and supervise through the Kariba scheme. Hydroelectric power will construction of the project. Preliminary works are be less costly than that produced by additional already under construction and power is expected to thermal plants; it will also eliminate sole dependence begin to flow from the project by 1960. The first stage on one mine which supplies coal for thermal power, is expected to reach its full potential of nearly four and on a single-track railroad over which coal has to billion kilowatt hours per year by 1963. The total cost be transported long distances to the power plants. .40. B7f~~~~~~~~~~~~~~~~7 Rhodesia and Nyasaland One of the wotrld's largest high and a mile wide at the top. Two unlderground power- hydroelectric projects is being built across the Kariba Gorge houises will eventually hold tuwelve 100,000-kilowatt gen- of the Zanibezi River. The arch-type damz will be 400 feet erators, of whichi five will be installed in the first phase. RUANDA-URUNDI SOUTH AFRICA At the request of the Belgian Government, a Bank TRANSPORT LOAN mission visited the Trust Territory of Ruanda-Urundi in November and December 1955 to study economic £9 million ($25.2 million) 10-year 41/2% loan of November 28, 1955 conditins and examine the Territory's Ten Year Development Plan. Subsequently the Bank offered to BORROWER * South Africa assist the Territory in the current revision of its JOINT FINANCING * The Bank's loan was made simul- Development Plan, and a mission is expected to go taneously with a $25 million issue of South African to Ruanda-Urundi for this purpose in August. bonds offered to the public by an underwriting group of United States investment firms and banks headed SOMALILAND by Dillon, Read & Co., Inc. At the request of the Italian Government, a Bank PURPOSE - Improvements to the services of the South survey mission visited the Trust Territory of Somali- African Railways and Harbours Administration. land curing March-April 1956. The purpose of the The rapid growth of the South African economy mission was to study the existing situation and since World War II, mainly in mining and industries possibilities for development in the light of the involving large amounts of railroad freight, has approaching termination of the Trusteeship in 1960. necessitated continuous expansion of the railway The mission's report is now being prepared. system. An expansion program was started in 1947, -41. and two previous Bank loans, totaling $50 million, improvements of the permanent way and is purchasing helped to finance earlier phases of it. The proceeds of additional locomotives, freight cars and passenger this year's loan and of the bond issue are being coaches to increase the carrying capacity of the applied to expenditures on the program during the railways. Total capital expenditures during the three- three years from April 1955 to March 1958. During year period will be equivalent to over $500 million, this period the Administration is making extensive of which more than a fourth will be spent overseas. ASTA AND TEE MPDDLE EAST LOANS DURtNG FISCAL YEAR of Rangoon, and the purchase of floating equipment Country No. Amouint such as dredges and tugs for harbor operations. Burma 2 S 19,350,000 The total cost is estimated at the equivalent of India 1 75,000,000 $19.3 million. The Bank's loan will finance the Japan 2 13,300,000 Lebanon 1 27',00,000 necessary imported equipment, materials and services. Pakistan 2 19,000,000 ECONOMIC BENEFITS * The Port of Rangoon is Thailand 1 12,000,000 Burma's chief port and handles four-fifths of the 9 165,650,000 country's foreign trade. Installations at the port were almost completely destroyed during World War II TOTAL LOANS 1947-1956 and, although partial rehabilitation was subsequently undertaken, further restoration and improvement are Burma 2 19,350,000 essential to handle increasing trade. The project will Ceylon 1 19,110,000 India 8 199,924,313 increase the capacity of the port, facilitate the move- Iraq 1 6,293,946 ment of freight, and shorten the turn-around time Japan 5 53,500,000 of vessels. Lebanon 1 27,000,000 Pakistan 6 77,250,000 RAILWAY LOAN Thailand 4 37,400,000 S5.35 million 15-year 43/4¾% loan of May 4, 1956 Lending in Asia- BORROWER * Burma 28 loans in 8 countries totaling $439,828,259 PURPOSE * The execution of a rehabilitation and development program being carried out by the Burma Railways to improve efficiency and service, especially AFGHANISTAN in the movement of rice, timber and minerals destined At the end of the fiscal year, the Bank was arranging for export. to send to Afghanistan a fact-finding mission which The railways radiate out of Rangoon to most of the had been requested by the Government. main towns in Burma and carry the bulk of the country's freight and passenger traffic. The railways, like the Port, were heavily damaged during World BURMA War II. With the gradual elimination of civil disorders, PORT LOAN railway service is being improved and railway installa- $14 million 20-year 43/4¾% loan of May 4, 1956 tions are being restored. The main needs now are for BORROWER * The Commissioners for the Port of additional freight cars to cope with the growing traffic, Rangoon, a public corporation. new passenger coaches to replace obsolete and dam- PURPOSE * The reconstruction of three general cargo aged stock, heavier rails on the permanent way, and berths, with storage and service facilities, at the Port reconstruction or further repair of a number of .42- damaged bridges. All these are provided for under the of the Tata steel works to 2,000,000 long tons of program being carried out during the four years ingots, or 1,500,000 tons of finished steel. 1955-59. The total cost of the program is estimated at Expansion and modernization of some parts of the the equivalent of $35 million. The Bank's loan will Tata plant were begun in 1951; the Company has now pay for imported freight cars, diesel railcars and embarked on a second expansion program which bridge construction materials. consists of further modernization and additions to existing plant throughout the whole process of steel CE Y L ON production. Both programs should be virtually com- The Bank assisted the Government in drawing up plete by 1958. Total investment for the period April plans for the establishment of a Development Finance 1955 to March 1960 is expected to be equivalent to Corporation, which was founded by an act of Parlia- about $250 million. The Tata Company has engaged ment in October 1955. A staff member on leave of the services of foreign companies to design and absence from the Bank continued to serve as Director supervise the construction of most of the works of the Ceylon Institute of Scientific and Industrial involved in the second expansion program. This Research. construction is scheduled to be finished by June 1958 and will cost about $130 million; the Bank's loan will EGYPT be disbursed against part of the foreign exchange Toward the end of 1955, the Bank and representatives component of that cost. of the Egyptian Government held discussions in ECONOMIC BENEFITS - The Tata expansion program Washington concerning the possible financing of the is included in the investment foreseen for the private High Aswan Dam project. These discussions were sector in India's Second Five-Year Plan. The Plan joined by the Governments of the United Kingdom envisages an increase in domestic production of and the United States, and led to a proposal by the finished steel from the present level of 11/4 million tons two Governments and the Bank. Under this proposal, to about 41/2 million tons a year. The demand for the Bank was prepared, under certain conditions, to steel in India already necessitates heavy imports and consider financing up to $200 million of the foreign it is expected that growth in other sectors of the exchange costs of the project; one of these conditions economy will increase the demand for steel products, was that the balance of the foreign exchange cost particularly for railways, industry, power, irrigation would be available from other sources. At the end works and other construction. The increased output of the fiscal year, agreement on the proposal had not of steel now planned should be absorbed by the been reached. internal market. PARTICIPATION * $2,355,000 maturing 1959, by the IN D IA First National City Bank of New York, Irving Trust Company and the Manufacturers Trust Company. LOAN FOR IRON AND STEEL PRODUCTION OTHER ACTIVITIES $75 million 15-year 43/4%G loan of June 26, 1956 ECONOMIC MISSION * A Bank mission went to India BORROWER * The Tata Iron and Steel Company, in April 1956 for a stay of about three months to limited undertake a comprehensive review of the economic The Tata Company owns and operates one of the situation, with particular reference to India's progress largest integrated steel plants in Asia. The plant is under the first Five-Year Plan, and to study the Second located in Jamshedpur and its proximity to ample Five-Year Plan. sources of raw materials and electric power enables it LOAN PROJECT * The Bank has under consideration to produce steel at costs as low as any in the world. an application from the Indian Iron and Steel Com- PURPOSE . To increase the annual productive capacity pany Ltd., for a loan for the further expansion .43. of the company's works at Burnpur. In 1952 the Bank it will replace. The project is expected to cost the made a loan of $31.5 million to this company to equivalent of $15.6 million and is scheduled for expand its iron and steel production. completion in 1957. PARTICIPATION .$791,000 maturing 1958 through IN D ON E S IA 1960, by the Manufacturers Trust Company. The report of the Bank mission which visited Indo- nesia early in the fiscal year, and a statement of the S8.1 million 15-year 43%S^. loan of February 21, 1956 management's general views on the country's eco- BORROWER * Japan Development Bank nomic and financial problems, was presented to the The Japan Development Bank is re-lending the Government in May 1956. proceeds of the loan to four companies in the steel, shipbuilding and automotive industries as follows: IRAN Nippon Steel Tube Co. Ltd., $2,600,000; Mitsubishi During the year, the Bank continued its assistance to Shipbuilding and Engineering Co. Ltd., $1,500,000; Iran's Plan Organization. Under the arrangements Ishikawajima Heavy Industries Co. Ltd., $1,650,000; agreed upon last year, the Bank recruited foreign and Toyota Motor Company Ltd., $2,350,000. specialists to serve with the Plan Organization. Thus PURPOSE * The loan is financing the purchase of more far, specialists in transport, municipal development, than 100 imported machines and machine tools for agriculture and industry have been selected. In various modernization projects being undertaken by addition, the Bank gave leave of absence to a member the four companies. The Nippon company is replacing of its staff to serve as chief of the Technical Bureau of two obsolete seamless tube mills with a single modern the Plan Organization. The President of the Bank mill of slightly higher capacity. Mitsubishi is re-tooling visited Iran in June 1956 to discuss the possibility of both for the regular production of an improved type Bank participation in financing the Government's of marine diesel engine and supercharger and for second Seven-Year Plan for Development; discussions more economical production of diesel engine parts. on this matter are continuing. Ishikawajima is also re-tooling, for the manufacture of larger and more powerful marine steam turbines J A PA N and other heavy industrial machinery. Toyota is modernizing its production of trucks and buses. The LOANS FOR INDUSTRY total cost of the projects will be equivalent to $25.5 $5.2 million (original amount S5.3 million) 15-year 45/8% million; they will all be complete by the end of 1958. loan of October 25, 1955 ECONOMIC BENEFITS - Modernization and expansion BORROWER * Japan Development Bank of Japanese heavy industry, including shipbuilding, is The Japan Development Bank is a government of basic importance to the economy. These industries agency established in 1951 to supply long-term credit not only produce for the domestic market, but are for industrial development and to act as an instrument also a principal source of export earnings. Exports for governmental guarantee of private foreign borrow- of iron and steel products accounted for more than ing. The bank is re-lending the proceeds of the 13%, of sales abroad in 1955, while exports of ma- International Bank loan to the Yawata Iron & Steel chinery and ships accounted for 12% of all exports.. Co., Ltd., Japan's largest and oldest steel enterprise. The five companies receiving funds under both loans PURPOSE . The installation of a modern steel plate to the Japan Development Bank this year are among mill at the Yawata Company's plant at the city of the leading manufacturers in their fields. The projects Yawata on Kyushu Island. The annual capacity of they are undertaking will result in more efficient the new mill, 360,000 tons of plate, will be somewhat operation, lower production costs, and improvement greater than the capacity of the three old mills which in the quality of their products. *44. -, 7 j¢ , 4n q '~~~~., . _. . . .. . . 4. Japan . he Mitsubishi Shipbuilding and Enlginee, ing Co. loan to Japan of Februco v 1956. Mitsubishi's share, $1.5 Ltd. whose Nagasaki yards ar e slhown above, was one of mnillion, will be utsed to impoirt heavy machine tools for making four indu Ntrial companies to rceive par t ofl an $8.1 imilhion improved diesel engines, siipel chargers and other machinery. P4RTICII'ATIO\ SI $1076,000 maturing 1958 through JORDAN 1959, by the Chase Manhattan Bank. The draft report of the General Survey Mission which OTHER ACTIVITIES visited Jordan in mid-1955 was informally submitted l.OAN PRSOJECTS *Negotiations are under way for a to the Government in May 1956. The report contains Bank loan to finance imported machinery and equip- a comprehensive analysis of the Jordan economy and ment for the reclamation of peatlands in the Ishikari recommendations for future development. Valley in Central Hokkaido; for a pilot project to demonstrate the feasibility of large-scale mechanical L E B A N 0 N land reclamation in areas of Hokkaido and Northern HSonshu; and for the importation of cattle to be used LOAN FOR POWER AND IRRIGATION particularly in the reclaimed areas. Meanwhile the $27 million 25-year 4¾%C loan of August 25, 1955 Japanese Government is carrying out engineering BORROWER *Litani River Authority studies of the Aichi irrigation and Hachiro Lagoon The Litani River Authority was established as an reclamation projects. autonomous government agency to construct, own The Bank also has under consideration a loan and operate the Litani River power and irrigation request from the Kawasaki Steel Corporation to works. finance the installation of a semi-continuous strip PtURPOSE . To provide Lebanon with 84,000 kilowatts mill at the company's plant at Chiba near Tokyo. of additional electric generating capacity and permit .45. the irrigation of land along the Mediterranean coast. century, have deteriorated so much that reconstruction The project includes the construction of a dam at is needed to avoid serious interruption in the flow of Karaoun on the Litani River; a tunnel to bring water goods to and from West Pakistan. The project being from the reservoir to the Bisri River; two hydro- financed will speed up the movement of freight, electric power plants; and 85 miles of transmission shorten the turn-around time of vessels, and increase lines to bring power from the plants to Saida and the capacity of the port. Beirut. An irrigation system will be built to use waters PARTICIPATION * $217,000 payable in Netherlands from the Karaoun reservoir. The whole project is guilders, maturing 1960, by Nederlandsche Handel- scheduled for completion in 1961 at a total cost which Maatschappij, N. V. has been estimated at the equivalent of $40 million. The Bank's loan will pay for engineering services and LOAN FOR PAPER MILL for imported equipment and materials. $4.2 million 15-year 45/8% loan of August 4, 1955 ECONOMIC BENEFITS * The project will more than BORROWER - Karnaphuli Paper Mills Limited double present generating capacity in Lebanon and The Karnaphuli Paper Mills Limited was established will relieve the power shortage which has existed, in 1952 by the Pakistan Industrial Development particularly in the Beirut area, for the past ten years. Corporation as a government-owned institution. In The coastal strip to be irrigated is now only partly line with its policy of transferring industrial enter- cultivated. With irrigation it can be intensively prises to private hands, the Corporation subsequently cultivated and devoted to the growing of citrus fruits sold a majority of the shares to private investors and bananas-important exports-and vegetables. in 1954. PURPOSE * To help finance a paper mill at Chandra- PAKISTAN ghona in East Pakistan. The mill manufactures pulp and paper from bamboo, and is designed to produce PORT LOAN 30,000 tons of writing and wrapping paper annually. $14.8 million 25-year 43/4%0 loan of August 4, 1955 The plant cost the equivalent of $20 million; the BORROWER T The Trustees of the Port of Karachi. Bank's loan provided about a third of the foreign The Port Trust is a corporate body vested with the exchange component. control and management of the Port of Karachi. ECONOMIC BENEFITS * In the past, Pakistan has had The Trustees represent shipping, commercial, indus- to import all of its paper requirements. The Kar- trial and governmental interests. naphuli plant is meeting present estimated needs for PURPOSE * The reconstruction and modernization of the types of paper it produces. The plant has also cargo berths and handling facilities at Karachi's East provided a new market for bamboo and given employ- Wharves. ment to about 3,000 people. Work is being carried out to replace 13 existing PARTICIPATION * $775,000 maturing 1956 through berths, and includes the construction of a concrete 1959, by the Bank of America and the Manufacturers quay wall, new storage facilities, access roads, railway Trust Company. tracks, the provision of portal cranes, and the con- OTHER ACTIVITIES struction of workshops and an additional office RESIDENT REPRESENTATIVES * During the year the building. The estimated cost of the entire project is Bank stationed a resident representative in Pakistan $24.4 million; it is scheduled for completion in 1962. to maintain close consultation with the Government ECONOMIC BENEFITS * Karachi is the only port of and other borrowers on matters of mutual interest: West Pakistan, and the East Wharves handle approxi- BANK MISSIONS * A Bank mission went to Pakistan mately 60% of the traffic which passes through the in April 1956 for about three months to review the port. The Wharves, built around the turn of the economic situation and to make a comprehensive *46- study of the Five-Year Plan recently drawn up by the T H A IL A N D Planning Board. Another Bank mission visited Pakistan in April for RAILWAY LOAN discussions with the Government and business corn- $12 million 15-year 4y8% loan of August 9, 1955 -munity regarding the establishment of an institution BORROWER * The State Railway of Thailand to provide and stimulate investment in private indus- PURPOSE * To assist in the execution of a five-year try. A Steering Committee composed of leading program being carried out by the Railway to improve Pakistani businessmen is drafting the charter of the efficiency and handle increasing traffic. proposed. company. The program includes both the rehabilitation of physical properties and the improvement of the S Y R IA Railway's operations, management and administra- Negotiations were begun in Washington in November tion. It provides for the renewal of rails on 875 miles 1955 for loans to finance highway construction, of track; the purchase of diesel locomotives, passenger equipment for the Port of Latakia, and drainage and coaches and freight cars; the installation of automatic irrigationa of the Ghab area in northwestern Syria. In couplers; the establishment of a modern telecommu- January 1956 the Syrian negotiators returned to nications system, and the construction or improvement Damascus to present to the Cabinet the draft loan of bridges, yards and sidings. The total cost of the documents for all three projects. The Bank was later program is estimated at the equivalent of $60 million; informed that the Cabinet would postpone its decision the Bank's loan will meet part of the foreign regarding the documents until November 1956. exchange costs involved. Thailanc * This year's loan of £S2 million was the second in7port of equipment flb the railway maintenance workshops to assist the modernization of the State Railway system. (left) at Bangkok, among the mzost m1odeln and efficient in The previous $3 million loan, made in 1950, financed the Asia, and also equipment Jbr the new signal boxes (right). .47. ECONOMIC BENEFITS * The railways radiate out of to maintain close consultation with the Government Bangkok, the capital city and principal seaport. They on matters of mutual interest. are the only means of transport that link all important LOAN PROJECTS - Negotiations are well advanced for regions of the country, and they facilitate transit trade a loan of about $3.4 million to the Port Authority of to Cambodia and Laos. Because of their importance Thailand for the financing of three dredges with in both internal and international trade, their im- ancillary equipment, to be operated in the channel proved efficiency can be expected to benefit the leading to the Port of Bangkok and in the Port basin. country's economic development as a whole. The Bank is studying the proposed Yan Hee multi- PARTICIPATION * $1,105,000 maturing 1958 through purpose project, for which the Government has 1959, by the Bank of America. requested a loan. The project is designed to be the OTHER ACTIVITIES primary source of power for the Bangkok area and RESIDEiNT REPRESENTATIVE * In February 1956 the the Central Plain. It would also provide for flood Bank stationed a resident representative in Thailand control and the improvement of irrigation in the plain. TOTAL LOANS 1947-1956 No further lending took place in Australasia during Australia 4 $258,500,000 the fiscal year. LOANS DURING FISCAL YEAR AUSTRIA Couintry No. Amoutnt At the close of the year, negotiations had been com- Finland 1 25,000,000 pleted for two loans totaling $31 million for electric 2 power development. One would be for a hydroelectric 2 40,000,000l project on the Danube and the other for the expansion TOTAL LOANS 1947-1956 of two thermal plants in south-central Austria. Austria 2 22,000,000 Belgium 3 66,000,000 Denmark 1 40,000,000 FINLAND Finland 6 65,081,595 France 1 250,000,000 ELECTRIC POWER LOAN Iceland 5 5,914,000 $15 million 20-year 43/4% loan of May 22, 1956 Italy 3 90'000'000 BORROWER * Mortgage Bank of Finland Oy Luxembourg 1 11,761,983 Netherlands 9 221,451,985 The Mortgage Bank of Finland is a new institution Norway 3 75,000,000 owned almost entirely by the Bank of Finland. It is Turkey 6 61,044,000 re-lending the proceeds of the International Bank loan Yugoslavia 3 60,700,000 to five public and private enterprises which are carry- Lending in Europe- ing out projects for the production and distribution 43 loans in 12 countries totaling $968,953,563 Of electric power. *48- Italy Ti'rough the 12-year program of the Cassa Per It Italy. The program incluides irrigation, roads power and Mezzogiorno, already assisted by Bank loans of $90 million, industry, as well as better ho7using. Above is a drainage new lhope and new employment are being brought to Southern canal to regulate water supplies on the flat Catania Plain. PURPOS]E * The construction of three hydroelectric expected by 1960, when all the plants will be in power plants with a combined generating capacity of operation. 242,000 kilowatts, the building of two thermal electric PARTICIPATION- *280.000 maturing 1959, by the stations with a combined capacity of 102,000 kilo- New York Trust Company. watts, and the completion of a transmission system to bring power from plants in northern Finland to the ITALY more populous and industrialized south. Staff members have visited Italy during the course The new plants will become part of the intercon- of the year for discussions of a further loan to assist nected power system which supplies the main con- the Cassa per it Mezzogiorno in carrying forward its suming centers. The total cost of the work being 12-year program for the development of Southern undertaken is estimated at $103 million. It is expected Italy. By the end of June preliminary negotiations had that most of the purchases of equipment under the begun for a loan for projects in the fields of industry, loan will be made in Western Europe, and that over electric power and agriculture. half the loan will be in European currencies. ECONOMIC BENEFITS * Most of the power produced in NORWAY Finland is used by industry, particularly the wood products industry, in which power costs are a sizeable HYDROELECTRIC POWER LOAN component of production costs. Demand for power $25 million 20-year 43/4'%c loan of May 3, 1956 has been increasing at the rate of 10% per annum in BORROWER - Norway recent years and can be expected to continue at this PURPOSE . To add 400,000 kilowatts of generating rate for the next few years at least. The expansion now capacity to the electricity network which serves south- under way should meet the increase in demand eastern Norway, including the city of Oslo. *49. The project is the first stage of a scheme to develop the other three before mid-1963. The area which will the power potential of the Tokke and Vinje river benefit from the new power now consumes 55% of all system in southern Norway. This scheme will be the the power produced in Norway. Projections of the largest hydroelectric development ever undertaken in power market in the area show that the additional Norway and will ultimately provide 800,000 kilowatts power can be absorbed quickly; all of it will be sold of new power capacity. In the first stage seven lakes in bulk to distributing authorities and to industry. at the headwaters of the rivers will be made into storage reservoirs. The power house will be constructed T U R KEY at Dalen, 100 miles west of Oslo. It will be equipped INDUSTRIAL DEVELOPMENT BANK * During the year with four hydroelectric units with a combined capacity the Bank approved three projects being financed by of 400,000 kilowatts. Also included in the first stage is the Industrial Development Bank-the construction the construction of a transmission system to feed of two textile mills and the expansion of a cement power from the new plant into the grid which supplies plant. These, and two supplemental credits for southeastern Norway. The total cost of the first stage projects previously approved, called for foreign ex- will be equivalent to $70 million; the Bank's loan will change allocations of $2.3 million from the second provide $25 million of this amount and the remainder of two $9 million loans which the International Bank will come from Norwegian sources. made to the Development Bank in 1950 and 1953. ECONOMIC BENEFITS D Despite the rapid expansion of Starting operations in 1951, the Industrial Develop- electric power capacity, supply has not kept pace with ment Bank had lent up to May 1956, 138 million demand. Power from the Tokke project will help Turkish lire ($49 million) to 305 enterprises, of which bring the situation into balance. The first 100,000- the International Bank's loans have provided $14 kilowatt unit will come into operation in 1961 and million in foreign exchange for 46 projects. WE S T RN H E MA I SP A E R E C HILE Since the program was started, it has had to be A Bank mission visited Chile in April and May 1956 considerably revised and expanded to keep pace with to study the progress being made in the Government's the extremely rapid growth of traffic, which in five program of economic and financial stabilization. In years doubled over most of the roads and more than June the Bank informed the Government that it tripled near large cities. This is the third Bank loan believed that a basis had been established for addi- for the highways. The first was made to begin the tional Bank lending in Chile, and that it would program; the second was made in 1953 when the proceed forthwith to consider loans for two coal program was revised to include the paving of most of mining projects and for certain electric power in- the roads in the project and the initiation of a com- stallations. prehensive maintenance program. Plans now call for higher standards of construction throughout, and the CO LO MB IA loan made this year will finance the additional foreign exchange costs involved. In addition, it will assist in HIGHWAY LOAN building a new 40-mile road linking Barranquilla on $16.5 million 15-year 43/4% loan of June 6,1956 the Caribbean coast with Cienaga, where it will meet BORROWER - Colombia the Atlantic Railroad being built with the assistance PIURPOSE - To complete a program begun in 1951 to of other Bank loans. All the work included in this rehabilitate Colombia's principal highways. highway program should be finished in 1958. It will .50. LOANS DURING FISCAL YEAR OTHER ACTIVITIES CountrV No. Anount LOAN PROJECTS e The Bank is considering a loan to Colombia 1 $ 16,500,000 assist in financing the expansion of the electric power Ecuador 1 5,000,000 facilities of the city of Bogota. .Guatemala 1 18,200,000 Haiti 1 2,600,000 CAUCA VALLEY DEVELOPMENT * In December 1955 Honduras 1 4,200,000 the Bank transmitted to the Colombian Government Nicaragua 4 12,200,000 and to the Autonomous Regional Corporation of the Panama 1 5,900,000 Cauca (CVC) the report of its advisory mission on Peru 1 5,000,000 Uruguay 1 5,500,000 the development of the Cauca Valley in Colombia. - The CVC was established in 1954 as an autonomous 12 75,100,000 non-political authority to develop systematically the TOTAL LOANS 1947-1956 resources of the Cauca region. The region is one of Brazil 10 194,090,000 Colombia's most important agricultural and industrial Chile 4 36,854,456 areas. Its rivers and rich land give it considerable Colombia 11 111,205,441 hydroelectric power potential for further industrial Ecuador 2 13,500,000 expansion, and endow it with promising opportunities El Salvador 2 23,645,000 Guatemala 1 18,200,000 for more extensive agricultural development. Haiti 1 2,600,000 In its report, the mission suggested those lines of Honduras 1 4,200,000 activity which the CVC could most advantageously Mexico 6 141,327,888 .. Nicaragua 9 21,390,115 follow in its first years, emphasizing the need for Panama 3 6,847,426 concentrating on a few well-defined undertakings. Paraguay 1 5,000,000 The core of the suggested program is the proper Peru 7 36,000,000 selection and location of major projects for electric Uruguay 2 38,500.000 power development and flood prevention. The mission Lending in Western Hemisphere- concluded that the CVC should probably first con- 60 loans in 14 countries totaling $653,360,326 struct a hydroelectric station at Calima, about 50 miles from Cali. This would be followed by a multi- cost the equivalent of $200 million, including purpose project at Timba, at the southern end of the $47,350,000 of foreign exchange provided by the Valley. The mission recommended that detailed three Bank loans. surveys be made in order to determine the most ECONOMIC BENEFITS * Lack of good transportation appropriate scale and timing of flood protection has been one of the chief obstacles to Colombia's measures. Pilot projects were also suggested for economic development. The rehabilitation of about drainage and irrigation. 1,900 miles of the principal highways was undertaken The other major recommendations made by the to provide good road transport between the larger mission were that CVC should establish an agricultural cities and the principal ocean and river ports. The division whose services would include the adminis- benefits of highway improvements are already be- tration of farm machinery pools and extension coming apparent. Prolonged traffic interruptions, due services, that the Corporation should propose a plan to washouts and landslides, have been virtually to improve departmental roads in the region, and that eliminated. Better alignment, more gradual gradients, it should appoint an Industrial Services Officer who increased width, and the paving of road surfaces have would aid in the establishment of new industries or reduced the time taken by road transport, in many the expansion of existing ones. The report concluded cases from days to a few hours, and have lowered by outlining various methods by which the CVC transportation costs. could finance the development program. *51 - Colombia Tlhree parallel 10,000 ft. high Sierras divide ever-growing traffic imposes progressively higher construc- Colombia from North to South. Road building and main- tion standards. The Bank has now made three loans, totalling tenance need the most rugged of modern equipment, and over $47 milliont, to aid Colombian highway programs. AGRICULTURAL MISSION * In June 1956 the Bank of land use be gradually changed so that flat, fertile transmitted to the Government a report on Colombia's lands now used mainly for pasture will be used agricultural development prepared by a mission which increasingly for mixed farming. Other recommenda- visited Colombia in April-June 1955. The mission tions relate to the relocation of the rural population found that while Colombia has made considerable on better lands; the improvement of farms through progress in the development of agriculture in recent flood protection, irrigation and drainage; the wide- years, the rate of progress has not been sufficient to spread application of modern methods of cultivation; keep pace with the needs of the rapidly growing marketing, financial and farm credit policies; and the population. Agriculture would need to be expanded organizational machinery necessary to plan, coordi- by 25%c over the next ten years merely to provide for nate and carry out the program. the expected increase in population. The mission The Bank has arranged to station a member of its concluded that a considerably higher increase could staff in Colombia for one year from July 1956 to advise be achieved over this period and suggested a program and assist in the execution of the agricultural program. for doing so. Its recommendations were directed both REPORT ON INVESTMENT PROGRAM * At the request toward measures that will open new crop and pasture of the Government, a Bank mission made a study of lands and toward measures that will bring about a Colombia's program for public investment and steady and substantial increase of output, at lower external borrowing, and in February 1956 presented production costs, on lands now in use. One of the its report and recommendations to the Government. most important recommendations is that the pattern The report presented in detail the mission's suggestions 52. regarding an investment program for 1956 and made PARTICIPATION * $197,000 maturing 1959 through some general proposals regarding the scale and 1960, by the Bank of America. character of public investment in the next few years. OTHER ACTIVITIES LOAN PROJECTS * The Bank has two projects under COSTA RICA consideration in Ecuador: a program for the con- Early in the fiscal year, the Bank informed the Govern- struction and maintenance of national highways and ment that it was prepared to open negotiations for a a project for the construction of a new port at loan to the Central Bank to provide foreign exchange, Guayaquil. to be re-lent through the commercial banking system, RESIDENT REPRESENTATIVE * The Bank continued to for the development of agriculture and industry. At station a representative in Ecuador during the year to the end of the fiscal year, legislation was pending in serve as liaison with the National Board of Planning the Congress authorizing negotiation of the loan. and Economic Co-ordination. ECUADOR GUATEMALA ELECTRIC POWER LOAN HIGHWAY LOAN $5 million 20-year 43/4%/0 loan of March 29, 1956 $18.2 million 15-year 45/8'7o loan of July 29, 1955 BORROWER * Empresa Electrica Quito, S. A. BORROWER * Guatemala The Empresa, an autonomous publicly-owned PURPOSE * To complete the Atlantic and Pacific corporation, supplies power to Quito, the capital of Highways and carry out a three-year program to Ecuador. improve and maintain existing roads. PURPOSE * The construction of plant and other The Atlantic Highway will be a paved, all-weather facilities that will nearly triple the supply of power to road, 190 miles long, running between Guatemala the Quito area. City and the Caribbean ports of Puerto Barrios and A 3,000-kilowatt thermal plant will be built in Santo Tomas. The Pacific Highway will be 217 miles Quito, a 14,480-kilowatt hydroelectric plant will be long, extending from the Mexican border to El built nearby and a 151/2-mile transmission line will be Salvador in the south. Both the roads are scheduled erected to bring 1,500 kilowatts of power from the to be finished in 1958. The total cost of the construc- nearby town of Machachi. In addition, existing trans- tion and maintenance program is estimated at the mission facilities will be improved and expanded. The equivalent of $40 million; the Bank's loan is paying Machachi transmission line and the thermal plant for imported equipment, materials and services. will be complete in 1957 and the hydroelectric plant ECONOMIC BENEFITS * The program should reduce in 1958. The total cost of the projects is estimated at transport costs, facilitate internal and external trade the equivalent of about $9 million; the Bank's loan and stimulate agricultural production, Guatemala's will pay for the-necessary imported equipment. main economic activity. The Atlantic Highway will ECONOMIC BENEFITS The Quito area has a population provide an alternative route to the single-track railroad of 225,000 and is one of the main industrial regions which is now the only connection between central of Ecuador. It is the center of textile manufacturing, Guatemala and the Caribbean. Adequate and depend- Ecuador's leading industry, and of a fast-growing able communications with Puerto Barrios are particu- pharmaceutical industry. The new power supply will larly important, since the port handles two-thirds of enable the Empresa to handle the heavy backlog of Guatemala's foreign trade. The Pacific Highway will demand from industrial consumers and provide for be the backbone of the road system in the Pacific the expected industrial and residential demands for coastal plain and the piedmont of western Guatemala. the next few years. Although this region contains the country's richest .53. agricultural land, it is virtually unexploited. The PARTICIPATION * $413,000 maturing 1959 through highway can be expected to make possible a rapid and 1960, by the Royal Bank of Canada. substantial increase of cultivation in the area. PARTICIPATION *$576,000 maturing 1959, by the HONDURAS Bank of America. OTHER ACTIVITIES HIGHWAY LOAN LOAN PROJECTS * The Bank is considering a loan to S4.2 million 9-year 41/2%, loan of December 22,1955 the Instituto de Fomento de la Producci6n to provide BORROWER * Honduras foreign exchange for medium and long term loans to PURPOSE * To establish and begin the operation of a farmers for the purchase of agricultural machinery road maintenance division in the Highway Depart- and supplies and livestock for breeding. ment, and to make preliminary engineering studies for RESIDENT REPRESENTATIVE * The Bank continued to the improvement and new construction of various station a resident representative in Guatemala. sections of two important trunk roads, the Northern and Western Highways. The total cost of these H A I TI measures is estimated at the equivalent of $8 million. ECONOMIC BENEFITS * Lack of an adequate transport HIGHWAY LOAN system seriously hampers the economic development $2.6 million 10-year 41/2% loan of May 7, 1956 of Honduras. Several areas have important possi- BORROWER * Haiti bilities for the development of crops, livestock and PURPOSE - A three-year highway improvement pro- timber but, in the absence of transport, they are now gram under which a highway maintenance section will virtually unused. Road maintenance is the first step be organized, staffed and equipped to rehabilitate and in a comprehensive program which will be undertaken repair 725 miles of primary and secondary roads and by the Government to improve and expand the high- to provide continuing maintenance on all public roads. way network and thereby encourage more widespread The establishment of an efficient maintenance development throughout the country. organization will be the first step toward the develop- PARTICIPATION- $872,000 maturing 1957 through ment of an adequate highway department, capable of 1959, by the Bank of America, the American Security supervising construction work and eventually of and Trust Company of Washington, D. C., and the carrying out important construction. The total cost Whitney National Bank of New Orleans. of the work being undertaken with Bank assistance is OTHER ACTIVITIES estimated at the equivalent of $4 million. The loan RESIDENT REPRESENTATIVE * The Bank continued to is for imported equipment, materials and services. station a resident representative in Honduras. ECONOMIC BENEFITS * Haiti is predominantly an agri- cultural country. Because of inadequate roads, crops M E X I C O pass through many successive and costly stages of LOAN PROJECT * The Bank has under consideration transportation before they reach markets and com- a loan to the Mexican Light and Power Company, mercial centers. The program now being undertaken Limited, to assist in financing the expansion of the will eliminate many of the difficulties of transport and Company's facilities for serving the Mexico City area. thus permit the more efficient marketing of agricultural POWER STUDY - The study on Mexico's future produce. This should reduce food imports and en- requirements for electric power and the means of courage larger exports of commercial crops. In financing them, which was initiated in 1953 and addition, easier motor travel should give further carried out with the Bank's cooperation, has been impetus to Haiti's growing tourist industry, now completed. The Government is now reviewing the second only to coffee as a source of foreign exchange. recommendations of the Report. .54. N IC AR A G U A beginning of an organized power network with facilities capable of satisfying an expanding market. ELECTRIC POWER LOANS Power from the new plant will supply the most S7.1 million 20-year 43/4% loan of July 8, 1955 populous and productive parts of Nicaragua and BORRONVER * Empresa Nacional de Luz y Fuerza de should meet their power requirements until 1963. Managua The Empresa is an autonomous government-owned AGRICULTURAL LOAN corporation which has responsibility for supplying $1.5 million 12-year 41¼4%7o loan of August 26, 1955 power to the Managua area. BORROWER * Instituto de Fomento Nacional PARTIC]:PATION * $724,000 maturing 1958 through PURPOSE * The importation of machinery, equipment 1960, by the Bank of America. and materials to be used for land clearance, soil $400,000 20-year 43/4% loan of July 8, 1955 erosion control, pasture improvement and milk BORROWVER * Instituto de Fomento Nacional processing, and the importation of cattle for breeding The Instituto is an autonomous government agency purposes. The Instituto will extend credit for the which provides financial and technical assistance for purchase of Bank-financed goods by farmers, ma- industrial and agricultural development. chinery operators and owners of milk-processing plants. PURPOSE OF LOANS * The construction of a 30,000- ECONOMIC BENEFITS * In recent years the rapid kilowalt thermal power plant in Managua, transmis- expansion of cotton cultivation has absorbed large sion lines to 15 outlying towns, and expansion of the areas of land formerly devoted to food crops. It has distribution systems in Managua and the towns. therefore become necessary to expand the area The $7.1 million loan will pay for imported equip- available for the cultivation of food crops and, at the ment, materials and services needed by Empresa to same time, to take measures to prevent soil erosion. build the new power plant and transmission lines and The loan will assist the Instituto in its attempts to to expand its distribution system in Managua. The meet this need by providing machinery for the $400,000 loan will be re-lent by Fomento to small clearance of new land and for erosion control opera- power distributors in the 15 outlying towns to defray tions. Through technical and financial assistance, the the foreign exchange costs of renovating and expand- Instituto is also encouraging the efforts of farmers to ing their distribution systems. These utilities will raise milk and beef production and to increase the distribute power transmitted from the new Managua supply of pasteurized milk and milk products. This plant. The total cost of the work to be carried out should help to raise dietary and health standards in with the help of the two loans is estimated at the Nicaragua. Progress in this direction is being achieved equivalent of $10.8 million and the work should be through pasture improvement, the establishment of completed by the end of 1957. milk collection centers and processing plants, and the ECONOMIC BENEFITS * The expansion of the Nicara- importation of more high grade breeding stock. guan economy in recent years has increased the PARTICIPATION * $735,000 maturing 1957 through demand for power, especially in Managua and the 1960, by the Bank of America. surrounding area. Generating and distributing facili- tics havc not kept pacc with this demand and many PORT OF CORINTO LOAN industrial and commercial establishments have had to $3.2 million 20-year 43/4% loan of May 22, 1956 install their own high-cost diesel power units. The BORROWER . Autoridad Portuaria de Corinto construction of the new thermal plant at Managua, The Authority was established in 1956 as an together with transmission lines to the 15 towns and autonomous public agency to operate the Port of improvements in the distribution systems, marks the Corinto. The Board of Directors of the Authority .55. includes representatives of agricultural, commercial the roads hampers the delivery of crops, makes and shipping interests and of the government. transport expensive for the farmer and weakens the PURPOSE * To increase the capacity of the Port of incentive to produce. Food imports into Panama and Corinto to handle both ships and cargo. Improvements the Canal Zone are more than twice the value of food include the construction of a 1,200-foot concrete grown domestically; but once the road system is wharf and two transit sheds, the acquisition of cargo- improved, domestic production could partially replace handling equipment, and the installation of rail, road imports. and service facilities. PARTICIPATION * $1,700,000 maturing 1959 through ECONOMIC BENEFITS * Corinto is Nicaragua's only 1960, by the Bank of America and the Chemical Corn deep water port on the Pacific and serves the most Exchange Bank of New York. highly developed part of Nicaragua. The Port handles OTHER ACTIVITIES about three-quarters of Nicaragua's international RESIDENT REPRESENTATIVE * The Bank continued to trade. The rapid growth of trade in recent years and station a resident representative in Panama. especially of cotton and cottonseed exports has already overtaxed the capacity of the port, and traffic is still P E RU growing. The improvements now being undertaken will eliminate the serious delays encountered by HIGHWAY LOAN shipping at Corinto and will enable the port to handle $5 million 9-year 414%o loan of August 5, 1955 increasing traffic for some years to come. BORROWER * Peru PARTICIPATION * $121,000 maturing 1959 through PURPOSE * The execution of a program of highway 1960, by the Bank of America. maintenance including the training of personnel in OTHER ACTIVITIES modern maintenance methods. RESIDENT REPRESENTATIVE T The Bank continued to The loan will finance the importation of main- station a resident representative in Nicaragua. tenance equipment and heavy maintenance materials, spare parts and machinery for repair shops, and will PANAMA cover the fees of engineering consultants. The con- sultants will assist the Department of Highways during HIGHWAY LOAN a three-year period in organizing and carrying out the $5.9 million 9-year 41/4%o loan of July 12, 1955 program, and will conduct a preliminary survey of a BORROWER * Panama project for improvement of the easternmost section PURPOSE * To organize and equip a road maintenance of the trans-Andean road leading from Lima to the service in the Highway Department, and to recon- town of Pucallpa on the headwaters of the Amazon. struct most of Panama's surfaced highways. ECONOMIC BENEFITS * Roads are the chief means of Over a four-year period some 635 miles of highway transport between important regions of Peru. In are to be reconstructed and necessary maintenance is recent years the Government has invested heavily in to be carried out on all the surfaced highways. The road construction, but because of lack of maintenance total cost of the program is estimated at the equivalent many of the roads are already in need of rehabilitation. of $9.65 million; the Bank's loan will pay the cost of The operation of a modern, well-equipped and con- imported equipment, materials and services. tinuous maintenance service will protect the Govern- ECONOMIC BENEFITS * An efficient maintenance or- ment's investment and reduce the need for further ganization will reduce the cost of future upkeep and costly rehabilitation. Well-maintained roads will lower building of roads, and a good road system will remove trucking costs by increasing the economic life of one of the main obstacles to the development of vehicles; decrease road transit time; and reduce the Panama. At the present time, the poor condition of losses incurred in the shipment of perishable goods. *56 Uruguay Work is proceeding on the installation of a new this size to be installed at the plant with the help of Bank 50,000-kYlonwatt generator at the Bathle y Ordouiez thermal loans, and is partI of a larger expansion program aimied at power station in Montevideo. It is the second generator of mneeting expected demand for elec-tricit-v utntil abhout 1962. PARTICIPATION * $683,000 maturing 1958 through should come into full operation by the end of 1957. 1959, by the Chemical Corn Exchange Bank. ECONOMIC BENEFITS * The Batlle power project is OTHER ACTIVITIES part of a larger power expansion program directed at LOAN PROJECT * The Bank has under consideration a meeting Uruguay's expected power demand until project for building to all-weather standards that part about 1962. Increased supplies of electric power are of the Lima to Pucallpa road east of the Aguaytia needed to promote further economic progress in River. Uruguay, not only in the Montevideo industrial area but also in the interior, where industrial sales of power U RU G U A Y have doubled in the past five years. ELECTRIC POWER LOAN PARTICIPATION * $654,000 equivalent, maturing 1958 S$'.5 million 20-year 43/4¾/-% loan of August 29, 1955 through 1960, by the First National City Bank of New BORROWER * Administraci6n General de las Usinas York and Nederlandsche Handel-Maatschappij, N.V. Electricas y los Telefonos del Estado (U. T. E.) OTHER ACTIVITIES U. T. E. is an autonomous government agency with LOAN PROJECTS - Negotiations began in June 1956 the exclusive right to provide electricity and telephone for a loan of about $25 million to finance the foreign service in Uruguay. exchange costs of a 103,000-kilowatt hydroelectric PURPOSE . The installation of a new 50,000-kilowatt power station on the Rio Negro at Rinc6n del generating unit in the Batlle y Ordohez thermal power Baygorria in central Uruguay. Discussions have also station in Montevideo. Another 50,000-kilowatt unit been held during the year on a livestock project was installed earlier under a Bank loan made to which has been under consideration for some time. U. T. E. in 1950. The new generator will increase the The Uruguayan Parliament has before it legislative statior's installed capacity to 150,000 kilowatts and measures necessary to put the project into effect. *57. Loans Classified by Purpose and Area JUNE 30, 1956 EXPRESSED IN MILLIONS OF UNITED STATES DOLLARS, NET OF CANCELLATIONS AND REFUNDINGS Areas Western Austral- Heniii- Purpose Total Africa Asia asia Europe sphere Grand Total . . . . . . . . . . . 2,667 347 439 259 969 653 Development Loans Total .2,170 347 439 259 472 653 ELECTRIC POWER Generation and Distribution . . . . . 789 178 136 33 130 312 TRANSPORT . . . . . . . . . . . 656 125 128 97 59 247 Railroads . . . . . . . . . . . 348 117 80 21 3 127 Shipping . . . . . . . . . . . 12 - - - 12 - Ports and Inland Waterways . . . . . 78 1 34 - 37 6 Roads . . . . . . . . . . . . 163 7 - 42 - 114 Airlines and Airports . . . . . . . 41 - - 34 7 - Pipelines (natural gas) . . . . . . . 14 - 14 - - COMMUNICATIONS Telephone, Telegraph and Radio . . . . 26 2 - - - 24 AGRICULTURE AND FORESTRY . . . . . . 228 - 41 89 51 47 Farm Mechanization . . . . . . . 99 - - 75 2 22 Irrigation and Flood Control . . . . . 88 - 31 6 31 20 Land Clearance and Improvement . . . 20 - 10 6 2 2 Crop Processing and Storage . . . . . 6 - - - 4 2 Livestock 1 .. I - - - I Forestry . . .... . . . .. 14 - - 2 12 - INDUSTRY . . . . . . . . . . . 331 2 134 40 132 23 Iron and Steel . . . . . . . . . 145 - 114 10 21 - Pulp and Paper . . . . . . . . . 63 - 4 - 39 20 Fertilizer and other Chemicals . . . . . 21 - - 1 20 - Other Industries . . . . . . . . . 48 - 6 18 22 2 Mining . . . . . . . . . . . 23 - - 11 12 - Development Banks . . . . . . . . 31 2 10 - 18 1 GENERAL DEVELOPMENT . . . . . . . 140 40 - - 100 Reconstruction Loans Total . . . . . . . . . . 497 - - - 497 *58. appendices Appendix Page A Balance Sheet . . . . . . . . . . . . . . . . . 60 B Comparative Statement of Income and Expenses . . . . . . . 62 C Statement of Currencies Held by the Bank . . . . . . . . . 63 D Statement of Subscriptions to Capital Stock and Voting Power . . . 64 E Funded Debt of the Bank . . . . . . . . . . . . . 65 F Summary Statement of Loans . . . . . . . . . . . . 66 G Notes to Financial Statements . . . . . . . . . . . . 67 H Opinion of Independent Auditor . . . . . . . . . . . 69 I Administrative Budget for the Fiscal Year Ending June 30, 1956 . 70 J Voting Power and Subscriptions of Member Countries . . . . . 71 K Governors and Alternates . . . . . . . . . . . . . 72 L Executive Directors and Alternates and their Voting Power . . . . 73 M Principal Officers of the Bank . . . . . . . . . . . . 75 .59. APPENDIX A Balance Sheet EXPRESSED IN UNITED STATES CURRENCY ASSETS Due from Banks and Other Depositories (See APPENDIX C) Member currencies, including $10,470,915 United States dollars Unrestricted ... . . . . . . . . . . . $ 15,805,616 Subject to restrictions-NOTEB ... . . . . . 99,298,373 $115,103,989 Non-member currencies . . . . . . . . . . . 8,997,186 $ 124,101,175 Investment Securities United States Government obligations ($323,887,000 face amount; at cost plus accumulated discount and less amortized premium) . . . . . . . . . $323,487,749 Canadian Government obligations (Can $24,075,000 face amount; at cost less amortized premium). . . . . . . . . . . 21,936,104 United Kingdom Government obligations (£2,390,000 face amount; at cost) . . . . . . . . 6,607,693 $352,031,546 Accrued interest . . . . . . . . . . . . . 2,701,758 354,733,304 Receivable on Account of Subscribed Capital (See APPENDIX D) Receivable in United States currency Calls on subscription to capital stock . . . . . . . $ 2,660,000 Receivable in other member currencies-NOTE B Non-negotiable, non-interest-bearing, demand notes $793,303,304 Amounts required to maintain value of currency holdings . . . . . . . . . . 4,547 793,307,851 795,967,851 Effective Loans Held by Bank (See APPENDIX F)-NOTE C (Including undisbursed balance of $472,254,184) . . . . 2,001,807,447 Accrued Interest, Commitment and Service Charges on Loans . . . . . . . . . . . . . . . . 13,844,814 Receivable from Purchasers on Account of Effective Loans Sold or Agreed to be Sold . . . . . . . . . . . 8,117,395 Other Receivables and Other Assets . . . . . . . . 653,974 Special Reserve Fund Assets-NOTE D Due from Banks-member currency-United States . . $ 578 Investment securities-United States Government obligations ($73,388,000 face amount; at cost plus accumulated discount) 73,348,008 Accrued loan commissions . . . . . . . . . . 3,655,504 77,004,090 Staff Retirement Plan Assets (Segregated and held in trust) . . . . . . . . . . 4,048,104 Total Assets . . . . . . . . . . . . $3,380,278,154 *60- APPENDIX A June 30, 1956 See Note A of NVotes to Financial Statements, Appendix G LIABILITIES, RESERVES AND CAPITAL Liabilities Accounts payable and accrued expenses, including $8,828,001 bond interest . $ 10,367,024 Collection on loans in advance of due date . . . . . . . . . . . 996,634 Undisbursed balance of effective loans (See APPENDIX F) On loans held by Bank . . . . . . . . . . . . . . . . $ 472,254,184 On loans sold or agreed to be sold . . . . . . . . . . . . . 4,629,143 476,883,327 Funded debt (See APPENDIX E) (Of this amount $85,466,760 is due within one year) . . . . . . . . 850,224,296 Bonds called for redemption not presented . . . . . . . . . . . $ 18,629 Less funds on deposit with Fiscal Agent therefor . . . . . . . . . 18,629 - Reserves for Losses Special reserve-NOTE D . . . . . . . . . . . . . . . . $ 77,004,090 Supplemental reserve against losses on loans and guarantees-NOTE E . 150,654,679 227,658,769 Staff Retirement Plan Reserve . . . . . . . . . . . . . . . 4,048,104 Capital (See APPENDIX D) Capital stock Authorized 100,000 shares of $100,000 par value each Subscribed 90,505 shares . . . . . . . . . . . . . . . $9,050,500,000 Less-Uncalled portion of subscriptions-NOTE F . . . . . . . . 7,240,400,000 1,810,100,000 Contingent Liability-LOANS SOLD UNDER GUARANTEE-NOTE G . . $25,834,500 Total Liabilities, Reserves and Capital . . . . . . . . . . $ 3,380,278,154 *61- APPENDIX B Comparative Statement of Income and Expenses FOR THE FISCAL YEARS ENDED JUNE 30, 1955 AND JUNE 30, 1956 EXPRESSED IN UNITED STATES CURRENCY-See Note A of Notes to Financial Statements, Appendix G July .1-June 30 1954-1955 1955-1956 Income Income from investments . . . . . . . . . . . . . . . . $ 9,682,052 $ 9,585,407 Income from loans: Interest .44,327,397 50,123,943 Commitment charges . . . . . . . . . . . . . . . . . 3,643,206 3,863,589 Commissions .13,306,897 14,747,349 Service charges . . . . . . . . . . . . . . . . . . . 192,814 303,843 Other income . . . . . . . . . . . . . . . . . . . . 692,753 4,088 Gross Income . . . . . . . . . . . . . . . . . $71,845,119 $78,628,219 Deduct-Amount equivalent to commissions appropriated to Special Reserve-NOTE D . . . . . . . . . . . 13,306,897 14,747.349 Gross Income Less Reserve Deduction . . . . . . . . . . $58,538,222 $63,880,870 Expenses Administrative expenses: Personal services . . . . . . . . . . . . . . . . . . $ 3,767,648 $ 4,131,105 Fees and compensation . . . . . . . . . . . . . . . . 567,006 598,234 Representation . . . . . . . . . . . . . . . . . . 75,216 69,078 Travel . . . . . . . . . . . . . . . . . . . . . 834,700 1,003,303 Supplies and material . . . . . . . . . . . . . . . . . 51,884 63,820 Rents and utility services . . . . . . . . . . . . . . . . 545,340 636,620 Communication services . . . . . . . . . . . . . . . . 168,538 198,238 Furniture and equipment . . . . . . . . . . . . . . . 69,793 92,916 Books and library services . . . . . . . . . . . . . . . 68,722 74,996 Printing ... ................. .. 74,099 102,527 Contributions to staff benefits . . . . . . . . . . . . . . 391,801 426,766 Insurance .24,501 30,079 Other expenses. . . . . . . . . . . . . . . . . . . 9,027 8,363 Total Administrative Expenses . . . . . . . . . . . . $ 6,648,275 $ 7,436,045 Interest on bonds . . . . . . . . . . . . . . . . . . 26,048,451 26,547,315 Bond issuance and other financial expenses-NoTE H . . . . . . . . 1,162,009 744,232 Gross Expenses . . . . . . . . . . . . . . . . $33,858,735 $34,727,592 Net Income-Appropriated to Supplemental Reserve against losses on loans and guarantees-NOTE E . . . . . . . . . . $24,679,487 $29,153,278 .62- APPENDIX C Statement of Currencies Held by the Bank JUNE 30, 1956 See Note A of Notes to Financial Statements, Appendix G Member CuLrrencies Amount expressed Total expr-essed Unit of in member currency in United States Member currency (Restricted) Rate of exchange dollars Afghanistan ... . . . . . Afghani 30,233,775 S= 16.80 S 1,799,629 Australia ......... Pound 148,105 $= 0.4464 331,757 Austria . ........ Schilling 7,086,999 $= 26.00 272,577 Belgium . ..... Franc 3,391,537 $= 50.00 67,831 Bolivia . ..... Boliviano 2,249,308 S= 190.00 11,838 Brazil . . . . . . . . . . Cruzeiro 347,307,296 S= 18.50 18,773,367 Burma . ........ Kyat 136,256 S= 4.7619 28,614 Canada . ........ Dollar 53,250 S= 1.10 48,409 Ceylon . ........ Rupee 39,721 $ = 4.7619 8,341 Chile . . . . . . . . . Peso 688,234,367 $ = 110.00 6,256,676 China ......... Yuan 21,480,529 $= 20.00 1,074,026 Colombia . . . . . . . . . Peso 12,060,611 $ = 1.949981 6,184,989 Costa Rica . . . . . . . . Colon 1,984,255 S = 5.615 353,385 Cuba ... . . . . . . . Peso 51,933 $= 1.00 51,933 Denmark ... . . . . . . Krone 2,173,021 $= 6.90714 314,605 Dominican Republic . . . . . Peso 972 $= 1.00 972 Ecuador ... . . . . . . Sucre 8,207,641 $= 15.00 547,176 Egypt . ... . . . . . . Pound 14,240 S= 0.34824 40,891 El Salvador . . . . . . . . Colon 420,101 $ = 2.50 168,040 Ethiopia . ........ Dollar 1,261,725 $= 2.48447 507,844 Finland . ........ Markka 1,569,425,656 $ = 230.00 6,823,590 France . ........ Franc 805,034,606 $= 349.60 2,302,806 Germrany . . . . . . . . . Deutsche Mark 4,802,068 $ = 4.20 1,143,350 Greece ......... . Drachma 22,400,000 S= 5.00 4,480,000 Guatemala ... . . . . . Quetzal 339,326 $= 1.00 339,326 Haiti .G.. . . . . . . . Gourde 30,170 $= 5.00 6,034 Honduras ........ . Lempira 341,338 $ 2.00 170,669 Iceland ... . . . . . . Krona 2,828,362 $ = 16.2857 173,672 India ... . . . . . . . Rupee 2,814,483 $= 4.7619 591,041 Indonesia ... . . . . . . Rupiah 2,164,125 $= 11.40 189,836 Iran . . . . . . . . . . Rial 512,268 $= 32.25 15,884 Iraq .......... Dinar 1,165 $= 0.3571 3,262 Israel .......... Pound 13,096 $= 1.80 7,275 Italy .......... Lira 368,069,669 $= 350.00 1,051,628 Japan .......... Yen 793,992,894 $= 360.00 2,205,536 Jordan ... . . . . . . Dinar 3,135 $= 0.3571 8,778 Korea ... . . . . . . . Hwan 1,124,446,600 $= 500.00 2,248,893 Lebanon ... . . . . . . Pound 1,567,497 $= 2.19148 715,269 Luxembourg ... . . . . . Franc 5,847,850 $= 50.00 116,957 Mexico ... . . . . . . Peso 134,388,625 $= 12.50 10,751,090 Netherlands ... . . . . . Guilder 2,523,398 $= 3.80 664,052 Nicaragua ... . . . . . Cordoba 850,661 $= 7.00 121,523 NorwaLy . ....... . Krone 584,598 $= 7.14286 81,844 Pakistan ......... . Rupee 480,276 $= 4.7619 100,858 Panama . ...... .. . Balboa 7,235 $ = 1.00 7,235 Paraguay ......... . Guarani 12,154,956 $= 60.00 202,583 Peru . . . . . . . . . . Sol 1,294,329 $ = 6.50 199,127 Philippines ... . . . . . Peso 2,375,746 $= 2.00 1,187,873 Sweden ... . . . . . . Krona 77,720,862 $= 5.17321 15,023,721 Syria ... . . . . . . . Pound 17,989 $= 2.19148 8,208 Thailand ... . . . . . . Baht 86,997 $= 12.50 6,960 Turkey ... . . . . . . Lira 344,365 $= 2.80 122,987 Union of South Africa . . . . . Pound 95,507 $ = 0.3571 267,421 United Kingdom . . . . . . Pound 208,340 $ = 0.3571 583,352 United States . . . . . . . Dollar $ = 153,439 Uruguay ... . . . . . . Peso 2,795,967 $= 1.519 1,840,603 Venezuela ... . . . . . Bolivar 4,556,723 $= 3.35 1,360,216 Yugoslavia ... . . . . . Dinar 2,153,572,366 $= 300.00 7,178,575 Restricted Currency (NOTE B) . . . . . . . . . . . . . . . . . . . . $ 99,298,373 Unrestricted Currency (Austria, Belgium, Canada, Denmark, France, Germany, Italy, Netherlands, Norway, Sweden, Union of South Africa, United Kingdom and United States) . . . . . 15,805,616 $115,103,989 Non-Member Currency (Switzerland) . . . . . . . . . . . . . . . . . . . . . 8,997,186 Total .$124,101,175 *63- APPENDIX D Statement of Subscriptions to Capital Stock and Voting Power JUNE 30, 1956 EXPRESSED IN UNITED STATES CURRENCY-See Note A of Notes to Financial Statements, Appendix G Amouints Paid in In currency of In non-interest- Subject to Subscrijptionis in member other bearing, non- coil to mneet United than United negotiable Amounts obligations Amount States States dollars demand notes past of Bank Number Member Shiares (Note 1) dollars (Note B) (Nate B) due (Note F) of votes Afghanistan . . . . 100 $ 10,000,000$ 200,000 8 1,800,000 s - $ - $ 8,000,000 350 Australia . . ..2,000 200,000,000 4,000,000 360,368 35,639,632 - 160,000,000 2,250 Austria . . ... 500 50,000,000 1,000,000 1,837,479 7,162,521 - 40,000,000 750 Belgium . . ...2,250 225,000,000 4,500,000 6,344,422 34,155,578 - 190,000,000 2,500 Bolivia . . ... 70 7,000,000 140,000 12,600 1,247,400 - 5,600,000 320 Brazil . . ...1,050 105,000,000 2,100,000 18,900,000 - - 84,000,000 1,300 Burma . . ... 150 15,000,000 300,000 52,200 2,647,800 - 12,000,000 400 Canada . . ...3,250 325,000,000 6,500,000 53,201,364 5,298,636 - 260,000,000 3,500 Ceylon . . .. 150 15,000,000 300,000 32,997 2,667,003 - 12,000,000 400 Chile . . ... 350 35,000,000 700,000 6,300,000 - - 28,000,000 600 China . . ...6,000 600,000,000 9,340,000 1,080,000 106,920,000 2,660,000 480,000,000 6,250 Colombia ..350 35,000,000 700,000 6,300,000 - - 28,000,000 600 Costa Rica . . ~~~ ~~~~~~~20 2,000,000 40,000 360,000-1,000 27 Cuba .. . ... 350 35,000,000 700,000 63,000 6,237,000 - 28,000,000 600 Denmark . ... 680 68,000,000 1,360,000 2,728,399 9,511,601 - 54,400,000 930 Dominican Republic 20 2,000,000 40,000 3,600 356,400 - 1,600,000 270 Ecuador. . . 32 3,200,000 64,000 576,000 - - 2,560,000 282 Egypt . . ... 533 53,300,000 1,066,000 95,940 9,498,060 - 42,640,000 783 El Salvador.. . . 10 1,000,000 20,000 180,000 - - 800,000 260 Ethiopia . ., 30 3,000,000 60,000 540,000 -- 2,400,000 280 Finland . . ... 380 38,000,000 760,000 6,840,000 - - 30,400,000 630 France . . .. 5,250 525,000,000 10,500,000 27,938,215 66,561,785 - 420,000,000 5,500 Germany .. . . 3,300 330,000,000 6,600,000 14,874,458 44,525,542 - 264,000,000 3,550 Greece . . ... 250 25,000,000 500,000 4,500,000 - - 20,000,000 500 Guatemala.. . . 20 2,000,000 40,000 360,000 - - 1,600,000 270 Haiti . . ... 20 2,000,000 40,000 10,800 349,200 - 1,600,000 270 Honduras.. . . 10 1,000,000 20,000 180,000 - - 800,000 260 Iceland . . ... 10 1,000 ,000 20,000 180,000 --800,000 260 India . . ...4,000 400,000,000 8,000,000 721,800 71,278,200 - 320,000,000 4,250 Indonesia .. . . 1,100 110,000,000 2,200,000 198,000 19,602,000 - 88,000,000 1,350 Iran .. . ... 336 33,600,000 672,000 60,480 5,987,520 - 26,880,000 586 Iraq .. . ... 60 6,000,000 120,000 20,880 1,059,120 - 4,800,000 310 Israel .. . ... 45 4,500,000 90,000 8,100 801,900 - 3,600,000 295 Italy. .....1,800 180,000,000 3,600,000 9,971,429 22,428,571 - 144,000,000 2,050 Japan. ....2,500 250,000,000 5,000,000 2,672,222 42,327,778 - 200,000,000 2,750 Jordan. .... 30 3,000,000 60,000 15,410 524,590 - 2,400,000 280 Korea. .... 125 12,500,000 250,000 2,250,000 - 10,000,000 375 Lebanon. .... 45 4,500,000 90,000 810,000 - - 3,600,000 295 Luxembourg . . 100o 10,000,000 200,000 118,000 1,682,000 - 8,000,000 350 Mexico. .... 650 65,000,000 1,300,000 11,700,000 - - 52,000,000 900 Netherlands . . . 2,750 275,000,000 5,500,000 9,500,000 40,000,000 - 220,000,000 3,000 Nicaragua. . . . 8 800,000 16,000 144,000 - 640,000 258 Norway. .... 500 50,000,000 1,000,000 370,000 8,630,000 - 40,000,000 750 Pakistan . . . . 1,000 100,000,000 2,000,000 180,008 17,819,992 - 80,000,000 1,250 Panama. .... 2 200,000 4,000 36,000 - - 160,000 252 Paraguay . . . . 14 1,400,000 28,000 252,000 - - 1,120,000 264 Peru. ..... 175 17,500,000 350,000 262,269 2,887,731 - 14,000,000 425 Philippines. . . . 150 15,000,000 300,000 1,200,000 1,500,000 - 12,000,000 400 Sweden. ....1,000 100,000,000 2,000,000 18,000,000 - - 80,000,000 1,250 Syria. .... 65 6,500,000 130,000 43,642 1,126,358 - 5,200,000 315 Thailand. .... 125 12,500,000 250,000 52,500 2,197,500 - 10,000,000 375 Turkey. .... 430 43,000,000 860,000 363,114 7,376,886 - 34,400,000 680 Union of South Africa, 1,000 100,000,000 2,000,000 6,060,000 11,940,000 -. 80,000,000 1,250 United Kingdom . .13,000 1,300,000,000 26,000,000 33,170,000 200,830,000 - 1,040,000,000 13,250 United States.. . 31,750 3,175,000,000 635,000,000 - - - 2,540,000,000 32,000 Uruguay. .... 105 10,500,000 210,000 1,890,000 - - 8,400,000 355 Venezuela. . . . 105 10,500,000 210,000 1,365,000 525,000 - 8,400,000 355 Yugoslavia. . . . 400 40,000,000 800,000 7,200,000 - - 32,000,000 650 Totals.. 90,505 89,050,500,000 8749,850,000 $264,286,696 $793,303,304 $2,660,000 87,240,400,000 105,005 .64. APPENDIX E Funded Debt of the Bank JUNE 30, 1956 EXPRESSED IN UNITED STATES CURRENCY-See Note A of Notes to Fi7tancial Statements, Appendix G Principal Annuial sinking Issute and maturity outstanding fund requirement Payable in UJnited States Dollars 2% Serial Bonds of 1950, due 1957-62 . . . . . . . . . . . $ 60,000,000 None 3% Three Year Bonds of 1953, due 1956 . . . . . . . . . . . 75,000,000 None 21/½% Five Year Bonds of 1954, due 1959 . . . . . . . . . . 50,000,000 None 31/2% Fifteen Year Bonds of 1954, due 1969 . . . . . . . . . . 100,000,000 1957-66 $ 4,000,000 1967-68 $ 5,000,000 31/½% Nineteen Year Bonds of 1952, due 1971 . . . . . . . . . 60,000,000 1957-66 $ 2,000,000 1967-70 $ 2,500,000 3% Twenty-Five Year Bonds of 1947, due 1972 . . . . . . . . . 150,000,000 1958-62 $ 3,000,000 1963-67 S 4,500,000 1968-72 $ 7,500,000 33/s% Twenty-Three Year Bonds of 1952, due 1975 . . . . . . . . 50,000,000 1958 $ 1,000,000 1959-74 $ 1,500,000 3% Twenty-Five Year Bonds of 1951, due 1976 . . . . . . . . . 50,000,000 1963 S 1,000,000 1964-75 $ 2,000,000 31/4% Thirty Year Bonds of 1951, due 1981 . . . . . . . . . . 100,000,000 1966-67 $ 2,000,000 1968-73 S 3,000,000 1974-80 $ 4,000,000 Sub-Total . . . . . . . . . . . . . . . . . $ 695,000,000 Payable in Canadian Dollars 31/2% F;fteen Year Bonds of 1954, due 1969 (Can$25,000,000).$ 22,727,273 1959-65 Can$800,000 1966-68 Can$900,000 31/,4% Ten Year Bonds of 1955, due 1965 (Can$15,000,000) . . . . . 13,636,363 1958-64 Can$500,000 Sub-Total .$ 36,363,636 Payable in Netherlands Guilders 31/2½c Fifteen Year Bonds of 1954, due 1969 (f40,000,000) . . . . . . $10,526,316 1960-69 f4,000,000 31/2% Twenty Year Bonds of 1955, due 1975 (f40,000,000) . . . . . . 10,526,316 1961-74 f2,640,000 1975 f3,040,000 Sub-Total . ............ . .. . $ 21,052,632 Payable in Pounds Sterling 31/2% Twenty Year Stock of 1951, due 1971 (£5,000,000) . . . . . . $ 14,000,000 1957-71 £166,700 3½/%2% Twenty Year Stock of 1954, due 1974 (£5,000,000) . . . . . . 14,000,000 1960-74 £166,700 Sub-Total . 28,000,000 Payable in Swiss Francs 31/2% Ten Year Bonds of 1952, due 1962 (Sw fr 50,000,000) . . . . . S 11,634,673 None 31/2% T welve Year Bonds of 1951, due 1963 (Sw fr 50,000,000) . . . . 11,634,671 None 31/2% Fifteen Year Bonds of 1953, due 1968 (Sw fr 50,000,000) . . . . 11,634,671 None 31/2% Fifteen Year Bonds of 1953 (Nov. Issue), due 1968 (Sw fr 50,000,000) 11,634,671 None 31/2% Eighteen Year Bonds of 1954, due 1972 (Sw fr 50,000,000) . . . . 11,634,671 None 31/2% Twenty Year Bonds of 1955, due 1976 (Sw fr 50,000,000) . . . . 11,634,671 1965-74 Sw fr 4,000,000 1975-76 Sw fr 5,000,000 Sub-Total . . . . . . . . . . . . . . . . . $ 69,808,028 Gross Total . . . . . . . . . . . . . . . . . $850,224,296 Each issue, except the 2% Serial Bonds of 1950, is subject to year for the five years following the date of this statement: redemption prior to maturity at the option of the Bank at the prices and upon the conditions stated in the respective bonds. Year Ending June 30 Amomnt The amounts shown as annual sinking fund requirements are the principal amounts of bonds to be purchased or redeemed 1957. . . . . . . . . . . . 85,466,760 to meet each year's requirement, except that in the cases of the 1959 . . . . . . 17,921,305 31/2% Twenty Year Stock of 1951 and of 1954 the amount 19607 . . . . * . . . 2,148,578 shown is the amount of funds to be provided annually for pur- 1961.7. . . .,7 chase or redemption. 1961 . . . . . . . . . . . . 23,667,970 The fcillowing table shows the aggregate principal amount of Total . . . . . . . $221,353,191 the matLrities, sinking fund and redemption requirements each .65. APPENDIX F Summary Statement of Loarts JUNE 30, 1956 EXPRESSED IN UNITED STATES CURRENCY-See Notes A, C and G of Notes to Financial Statemenlts Effective loans held by Bank Members in whose territories Disbursed Utndisbursed Loans not yet loans have been made] portion portion' Total3 effective4 Australia. .......... $ 222,050,482 $11,490,518 $233,541,000 Austria. ...........11,300,574 10,546,426 21,847,000 Belgium. ........71,949,382 7,854,384 79,803,766 Brazil. .........145,887,297 37,789,920 183,677,217 Burmna ............ - - 19,350,000 Ceylon. ...........3,561,424 15,548,576 19,110,000 Chile. ...........18,178,811 13,301,645 31,480,456 Colombia. ..........46,735,914 33,586,527 80,322,441 16,500,000 Denmnark. ..........36,580,000 36,580,000 Ecuador. ..........1,917,997 6,582,003 8,500,000 5,000,000 El Salvador. .........15,089,740 7,280,260 22,370,000 Ethiopia. ..........7,314,817 985,183 8,300,000 Finland. ..........33,803,527 5,761,402 39,564,929 15,000,000 France. ...........230,586,773 5,200,227 235,787,000 Guatemala. ..........4,264,342 13,359,658 17,624,000 Haiti ............ - - 2,600,000 Honduras. ..........- 3,328,000 3,328,000 Iceland. ...........5,751,640 5,751,640 India. ...........48,121.675 47,427,473 95,549,148 75.000,000 Italy. ...........34,539,969 39,065,031 73,605,000 10,144,000 Japan. ...........31,585,185 13,394,936 44,980,121 Lebanon. ..........- 27,000,000 27,000,000 Luxembourg. ...8,675,000 - 8,675,000 Mexico. .....97,620,595 28,065,895 125,686,490 Netheriands. .........65,049,985 65,049,985 Nicaragua. ...5,356,626 9,616,374 14,973,000 3,200,000 Norway. ...47,984,000 25,000,000 72,984,000 Pakistan. ........38,127,482 29,607,076 67,734,558 Panama. ..........490,426 4,450,000 4,940,426 Paraguay. ......2,180,361 2,319,639 4,500,000 Peru. .......12,850,274 19,055,226 31,905,500 South Africa. .........86,903,602 22,372,163 109,275,765 Thailand. ..........23,182,429 10,671,571 33,854,000 Turkey.46,708,025 13,572,975 60,281,000 United Kingdom.48,388,980 1,066,673 49,455,653 80,000,000 Uruguay. ......29,845,277 3,675,723 33,521,000 Yugoslavia. .........53,558,300 3,278,700 56,837,000 Totals . ..... 1,536,140,911 $472,254,184 $2,008,395,095 $226,794,000 Less Exchange Adjustmnent........... . . ...6,587,648 52,001,807,447 1 Loans are made (a) to the member or (b) to a political sub- SUMMARY OF CURRENCIES REPAYABLE division or a public or a private enterprise in the territories of the ON EFFECTIVE LOANS HELD BY BANK member with the member's guarantee. 2 This does not include $4,629,143 of effective loans which the Currency Amount Bank has agreed to sell. Of the undisbursed balance, the Bank has Austrian Schillings.$ 1,589,994 entered into irrevocable commitments to disburse $8,506,864. Belgian Francs ..... .6,914,571 3Original principal amount of loans signed ..$2,720,108,464 Canadian Dollars .... :. .... 78,919,551 DEDUCT: Danish Kroner. .......... 2,427,402 Deutsche Marks. ......... 13,832,421 (a) Cancellations and Fec rns........... 2,9,7 reunins . .. 5,76,16Italian Lire. ........... 8,991,801 (b) Principal repayments Japanese Yen. .......... 429,717 to the Bank . . . . 164,346,672 Mexican Pesos. .......... 800,000 (c) Loans sold or agreed to he Netherlands Guilders. ........ 29,178,788 sold of which $4,629,143 Norwegian Kroner. ...288,156 has not yet been disbursed 267,796,381 Pounds Sterling. ....54,328,353 effectie . . 26,794,00 711,13,369 South African Pounds. ........ 5,792,579 (d) Loans not yet effectiv_226_79 __0__71_713_36 Swedish Kronor. ......... 3,278,251 $2,008,395,095 Swiss Francs. .......... 58,009,985 DEDUCT: Exchange adjujstment. .... 6,587,648 United States Dollars. ........1,245,661,967 Effective loans held by Bank. .....$2,001,807,447 Disbursed portion of effective loans held by Bank . $1,536,140,911 4Agreements providing for these loans have been signed, but the ADD: Undisbursed portion of effective loans loans do not became effective and disbursements thereunder do not held by Bank. ....... 472,254,184 start until the borrower and guarantor, if any, take certain action $,0,9,9 and furnish certain documents to the Bank. The Bank has agreed $,0,9,9 to sell $8,366,000 of loans not yet effective and thus the total of DEDUCT: Exchange adjustment. .... 6,587,648 both effective and non-effective loans sold or agreed to be sold is Effective loans held by Bank. ......$2,001,807,447 the equivalent of $276,162,381. *66- APPENDIX G Notes to Financial Statements JUNE 30, 1956 N O T E A extent in its territories, to maintain the value of the Bank's Amounts in currencies other than United States dollars holdings of its 18% currency, including the principal have been translated into United States dollars: amount of any notes substituted therefor, and the Bank is required, if the par value of a member's currency is (i) In the cases of 46 members, at the par values as increased, to return to the member the increase in the specified in the "Schedule of Par Values", published by value of such 18% currency held by the Bank. The equiv- the International Monetary Fund; and alent of $4,547 is due from 1 member in order to maintain the value of its currency as required under Article II, (ii) In the cases of the remaining 12 members (Af- Section 9. ghanistan, Canada, China, France, Greece, Indonesia, Israel, Italy, Korea, Peru, Thailand and Uruguay), the NOTE C par values of whose currencies are not so specified, at The principal disbursed and outstanding on loans and the the rates used by such members in making payments accrued charges for interest, commitment fee, service of capital subscriptions to the Bank. charge and loan commission are receivable in United States dollars except the following amounts for which the (iii) In the case of non-member currency, all Swiss dollar equivalent is shown: francs at the rate of 4.2975 francs to 1 United States dollar. Principal Outstanding . . . . . . $283,891,296 Accrued Interest, Commitment No representation is made that any of such currencies is and Service Charges . . . . . . 2,593,388 convertible into any other of such currencies at any rate Accrued Loan Commissions . . . . 615,310 or rates. See also Note B. Total.$287,099,994 NOTE B These currencies of the several members, and the notes NOTE D issued by them in substitution for any part of such cur- The amount of commissions received by the Bank on rencies as permitted under the provisions of Article V, loans made or guaranteed by it is required under Article Section 12, are derived from the 18% of the subscriptions IV, Section 6, to be set aside as a special reserve to be to the capital stock of the Bank which is payable in the kept available for meeting obligations of the Bank created currencies of the respective members. Such 18% may be by borrowing or by guaranteeing loans. On all loans grant- loaned by the Bank, and funds received by the Bank on ed to date the effective rate of commission is 1%o per annum. account of principal of loans made by the Bank out of such currencies may be exchanged for other currencies or reloaned, only with the approval in each case of the N0T E member whose currency is involved; provided, however, Pursuant to action of the Board of Governors and Exec- that, if necessary, after the Bank's subscribed capital is utive Directors the net income of the Bank has been entirely called, such currencies may, without restriction by allocated to a Supplemental Reserve Against Losses on the members whose currencies are offered, be used or Loans and Guarantees Made by the Bank; and the future exchanged for the currencies required to meet contractual net income of the Bank will, until further action by the payments of interest, other charges or amortization on the Executive Directors or the Board of Governors, be Bank's own borrowings or to meet the Bank's liabilities allocated to this reserve. with respect to contractual payments on loans guaranteed by it. NOTE F Under Article II, Section 9, each member is required, if Subject to call by the Bank only when required to meet the par value of its currency is reduced or if the foreign the obligations of the Bank created by borrowing or exchange value of its currency depreciates to a significant guaranteeing loans. *67- APPENDIX G Notes to Financial Statements (continued) NOTE G NOTE I The Bank has sold under its guarantee $69,003,844 of In terms of United States dollars of the weight and fineness loans of which amount $43,169,344 has been retired. The in effect on July 1, 1944. following table sets forth the maturities of the guaranteed obligations outstanding: GENERAL As at June 30, 1956 applications for membership have Period Amount been received from the following countries: July 1, 1956 to June 30, 1957 .$ . 2,742,500 Sbcito July 1, 1957 to June 30, 1958 1,784,000 Country Subscription July 1, 1958 to June 30, 1959 1,113,000 July 1, 1959 to June 30, 1960 1,000,000 Argentina . . . . . . . . $150,000,000 July 1, 1960 to June 30, 1961 . . . . 7,285,000 Viet Nam . . . . . . . . $ 12,500,000 Thereafter . . . . . . . . . 11,910,000 The Sudan . . . . . . . . To be determined Total . . $25,834,500 In addition applications for increases in share subscriptions have been received from Brazil ($45,000,000) and Ecuador NOTE H ($3,200,000). The Bank has written off against income all discount and Prior to June 30, 1956 the Board of Governors approved premium on bonds sold or redeemed in the respective the application of Viet Nam, which has until December 31, years in which sale or redemption occurred. 1956 to complete action necessary to become a member. *68. APPENDIX H Opinion of Independent Auditor 1000 VERMONT AVENUE, N. W., WASHINGTON 5, D. C. August 6, 1956 To INTERNATIONAL BANK * FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON, D. C. We have examined the financial statements listed below of International Bank for Reconstruction and Development as of June 30, 1956. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, such financial statements, with the notes thereto, present fairly the financial position of the Bank at June 30, 1956, expressed in United States currency, and the results of its operations for the twelve months then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. PRICE WATERHOUSE & Co. FINANCIAL STATEMENTS COVERED BY THE FOREGOING OPINION Appendix Balance Sheet . . . . . . . . . . . . . . . . A Comparative Statement of Income and Expenses . . . . . . B Statement of Currencies Held by the Bank . . . . . . . C Statement of Subscriptions to Capital Stock and Voting Power. D Funded Debt of the Bank . . . . . . . . . . . . E Summary Statement of Loans . . . . . . . . . . . F Notes to Financial Statements . . . . . . . . . . . G *69- APPENDIX I Administrative Budget FOR THE FISCAL YEAR ENDING JUNE 30, 1957 There is outlined below the Administrative Budget for the fiscal year ending June 30, 1957, as prepared by the President and approved by the Executive Directors in accordance with Section 19 of the By-Laws. For purposes of comparison, there are also outlined below the administrative expenses incurred during the fiscal years ended June 30, 1955, and 1956. Actuial Expenses Budget 1955 1956 1957 BOARD OF GOVERNORS . . . . . . $ 193,037 $ 348,756 $ 214,000 EXECUTIVE DIRECTORS . . . . . . 372,381 387,476 420,000 STAFF Personal Services . . . . . . 3,247,322 3,581,070 3,811,500 Staff Benefits .361,456 392,760 432,500 Travel .557,046 595,036 608,000 Consultants .176,724 237,434 200,000 Representation .57,376 4,399,924 49,405 4,855,705 53,000 5,105,000 OTHER ADMINISTRATIVE EXPENSES Fees & Compensation . . . . . 140,003 126,062 120,000 Supplies & Materials . . . . . 49,989 59,899 60,000 Rents & Maintenance . . . . . 536,206 630,165 625,000 Communications .. . . . 165,993 184,712 186,000 Furniture & Equipment . . . . 67,596 75,647 65,000 Printing .60,593 85,457 78,000 Books & Library Service . . . . 68,630 74,159 77,500 Insurance .24,501 28,728 23,000 Other .9,027 1,122,538 8,363 1,273,192 10,000 1,244,500 CONTINGENCY . . . . . . . . - - 100,000 Total .$6,087,880 $6,865,129 $7,083,500 SERVICES TO MEMBER COUNTRIES General Survey Missions . . . . 208,172 131,449 217,900 Resident Representatives . . . . 83,994 93,534 131,600 Economic Development Institute . . 10,511 71,258 97,000 Training Programs . . . . . . 36,173 11,502 31,000 Indus Basin Discussions . . . . 147,779 196,918 156,000 Other Advisory Services . . . . 73,766 66,255 53,500 Total ... . . . . 560,395 570,916 687,000 Grand Total . . . . . $6,648,275 $7,436,045 $7,770,500 No estimate has been made of bond registration, issuance and other financial expenditure for the fiscal year ending June 30, 1957. The amount of bonds which may be issued by the Bank during the year is not known. These expenditures may amount to about $100,000, exclusive of commissions and premiums, for each $100 million of bonds which the Bank may issue. .70. APPENDIX J Voting Power and Subscriptions of Member Countries JUNE 30, 1956 Voting power Subscriptions Number of Percent of Amount Percent of Member Government votes total (in millions of dollars) total Afghanistan ........ 350 .33 10.0 .11 Australia ....... . 2,250 2.14 200.0 2.21 Austria ... . . . . . . . . . . 750 .71 50.0 .55 Belgium ... . . . . . . . . . . 2,500 2.38 225.0 2.49 Bolivia ... . . . . . . . . . . 320 .30 7.0 .08 Brazil ............. . 1,300 1.24 105.0 1.16 Burma ... . . . . . . . . . . 400 .38 15.0 .17 Canada ... . . . . . . . . . . 3,500 3.33 325.0 3.59 Ceylon ... . . . . . . . . . . 400 .38 15.0 .17 Chile ... . . . . . . . . . . . 600 .57 35.0 .39 China ............. . 6,250 5.95 600.0 6.63 Colombia . . . . . . . . . . . . 600 .57 35.0 .39 Costa Rica . . . . . . . . . . . . 270 .26 2.0 .02 Cuba ... . . . . . . . . . . . 600 .57 35.0 .39 Denmark ............ . 930 .88 68.0 .75 Dominican Republic . . . . . . . . . 270 .26 2.0 .02 Ecuador ... . . . . . . . . . . 282 .27 3.2 .03 Egypt ............. . 783 .75 53.3 .59 El Salvador . . . . . . . . . . . . 260 .25 1.0 .01 Ethiopia . ...... ...... 280 .27 3.0 .03 Finland ............ 630 .60 38.0 .42 France ............ 5,500 5.24 525.0 5.80 Germany . . . . . . . . . . . . 3,550 3.38 330.0 3.65 Greece ... . . .... . . . . 500 .48 25.0 .28 Guatemala ... . . ..... . . . 270 .26 2.0 .02 Haiti ... . . . . . . . . . . . 270 .26 2.0 .02 Honduras . ... ...... .. . 260 .25 1.0 .01 Iceland ... . . . . . . . . . . 260 .25 1.0 .01 India ... . . . . . . . . . . . 4,250 4.05 400.0 4.42 Indonesia ... . . . . . . . . . 1,350 1.29 110.0 1.23 Iran ... . . . . . . . . . . . 586 .56 33.6 .37 Iraq ... . . . . . . . . . . . 310 .29 6.0 .07 Israel ... . . . . . . . . . . . 295 .28 4.5 .05 Italy . . . . . . . . . . . . . . 2,050 1.95 180.0 1.99 Japan ... ........... . 2,750 2.62 250.0 2.76 Jordan ... . . . . . . . . . . 280 .27 3.0 .03 Korea ... . . . . . . . . . . 375 .36 12.5 .14 Lebanon ... . . . . . . . . . . 295 .28 4.5 .05 Luxembourg ........... . 350 .33 10.0 .11 Mexico . . . . . . . . . . . . . 900 .86 65.0 .72 Netherlands ... . . . . . . . . . 3,000 2.86 275.0 3.04 Nicaragua ... . . . . . . . . . 258 .24 .8 .01 Norway . . . . . . . . . . . . . 750 .71 50.0 .55 Pakistan ... . . . . . . . . . . 1,250 1.19 100.0 1.10 Panama ... . . . . . . . . . . 252 .24 .2 1 Paraguay ............ . 264 .25 1.4 .01 Peru ... . . . . . . . . . . . 425 .40 17.5 .19 Philippines ... . . . . . . . . . 400 .38 15.0 .17 Sweden ... . . . . . . . . . . 1,250 1.19 100.0 1.10 Syria ... . . . . . . . . . . . 315 .30 6.5 .07 Thailand ... . . . . . . . . . . 375 .36 12.5 .14 Turkey ... . . . . . . . . . . 680 .65 43.0 .47 Union of South Africa . . . . . . . . . 1,250 1.19 100.0 1.10 United Kingdom . . . . . . . . . . 13,250 12.62 1,300.0 14.36 United States . . . . I . . . . . . 32,000 30.47 3,175.0 35.08 Uruguay ... . . . . . . . . . . 355 .34 10.5 .12 Venezuela ... . . . . . . . . . 355 .34 10.5 .12 Yugoslavia ... . . . . . . . . . 650 .62 40.0 .44 Totals ... . . . . . . . 105,005 100.00 9,050.5 100.00 ILess than .005 percent *71. APPENDIX K Governors and Alternates JUNE 30, 1956 Member Government Governor Alternate Afghanistan . . . . . . . . . . . Abdul Malik Abdul Karim Hakimi Australia . . . . . . . . . . . . Sir Arthur William Fadden Sir Roland Wilson Austria . . . . . . . . . . . . Reinhard Kamitz Wilhelm Teufenstein Belgium . . . . . . . . . . . . Henri Liebaert Maurice Frere Bolivia . . . . . . . . . . . . . Augusto Cuadros Sanchez Fernando Pou Munt Brazil . . . . . . . . . . . . . Eugenio Gudin Prudente de Moraes Neto Burma . . . . . . . . . . . . . U Tin U Kyaw Nyun Canada . . . . . . . . . . . . Walter E. Harris A. F. W. Plumptre Ceylon . . . . . . . . . . . . . Stanley de Zoysa R. S. S. Gunewardene Chile . . . . . . . . . . . . . Arturo Maschke Felipe Herrera China . . . . . . . . . . . . . Peh-Yuan Hsu Tse-kai Chang Colohmbia . . . . . . . . . . . . Luis Angel Arango Eduardo Arias Robledo Costa: Rica . . . . . . . . . . . Angel Coronas Mario Fernandez Cuba . . . . . . . . . . . . . Joaquin E. Meyer Denmark . . . . . . . . . . . . Svend Nielsen Hakon Jespersen Dominican Republic . . . . . . . . . Milton Messina Eudaldo Troncoso Pou Ecuador . . . . . . . . . . . . Luis Ernesto Borja Guillermo Perez-Chiriboga Egypt . . . . . . . . . . . . . Ahmed Zaki Saad Albert Mansour El Salvador . . . . . . . . . . . Catalino Herrera Luis Escalante-Arce Ethiopia . . . . . . . . . . . . Menasse Lemma Finland . . . . . . . . . . . . Klaus Waris Ralf Torngren France . . . . . . . . . . . . . Minister of Finance Pierre Mendes-France Germany . . . . . . . . . . . . Ludwig Erhard Fritz Schaeffer Greece . . . . . . . . . . . . . Demetrios Chelmis J. S. Pesmazoglu Guatemala . . . . . . . . . . . Gustavo Miron Porras Gabriel Orellana Haiti . . . . . . . . . . . . . Clement Jumelle Christian Aime Honduras . . . . . . . . . . . . Guillermo Lopez Rodezno Rafael Callejas H. Iceland . . . . . . . . . . . . . Jon Arnason Vilhjalmur Thor India . . . . . . . . . . . . . Chintaman D. Deshmukh Benegal Rama Rau Indonesia . . . . . . . . . . . . Ong Eng Die Loekman Hakim Iran . . . . . . . . . . . . . Ali Asghar Nasser Djalaleddin Aghili Iraq . . . . . . . . . . . . . Sayid Khalil Kenna Mudhaffer Hussien Jamil Israel . . . . . . . . . . . . . David Horowitz Martin Rosenbluth Italy . . . . . . . . . . . . . Donato Menichella Giorgio Cigliana-Piazza Japan . . . . . . . . . . . . . Hisato Ichimada Eikichi Araki Jordan . . . . . . . . . . . . . Hamad Farhan Yacoub Iwais Korea . . . . . . . . . . . . . Yu Taik Kim Young Chan Kim Lebanon . . . . . . . . . . . . Andre Tueni Raja Himadeh Luxembourg . . . . . . . . . . . Pierre Werner Rene Franck Mexico . . . . . . . . . . . . Antonio Carrillo Flores Jose Hernandez Delgado Netherlands . . . . . . . . . . . J. van de Kieft A. M. de Jong Nicaragua . . . . . . . . . . . . Guillermo Sevilla-Sacasa Alejandro Baca Munoz Norway . . . . . . . . . . . . Arne Skaug Carsten Nielsen Pakistan . . . . . . . . . . . . Syed Amjad Ali Vaqar Ahmed Panama . . . . . . . . . . . . J. J. Vallarino Paraguay . . . . . . . . . . . . Pedro A. Caballero Julio C. Kolberg Peru . . . . . . . . . . . . . Fernando Berckemeyer Emilio Foley Philippines . . . . . . . . . . . Miguel Cuaderno Sr. Emilio Abello Sweden . . . . . . . . . . . . N. G. Lange A. Lundgren Syria . . . . . . . . . . . . . Husni A. Sawwaf Adnan Farra Thailand . . . . . . . . . . . . Serm Vinicchayakul Puey Ungphakorn Turkey,. . . . . . . . . . . . . Nedim Okmen Sait Naci Ergin Union of South Africa . . . . . . . . Eric Hendrik Louw M. H. de Kock United Kingdom . . . . . . . . . . Harold Macnillan Sir Leslie Rowan United States . . . . . . . . . . . George M. Humphrey Herbert V. Prochnow Uruguay . . . . . . . . . . . . Nilo Berchesi Roberto Ferber Venezuela . . . . . . . . . . . . Jose Joaquin Gonzalez-Gorrondona, Jr. Alejandro J. Huizi-Aguiar Yugoslavia . . . . . . . . . . . Milentije Popovic Vojin Guzina *72- APPENDIX L Execuitive Directors and Alternates and their Voting Power JUNE 30, 1956 Directors Alternates Casting the Votes by Total APPOINTED votes of country votes Andrew N. Overby John S. Hooker United States 32,000 32,000 Viscount Harcourt David 13. Pitblado United Kingdom 13,250 13,250 Kan Lee China 6,250 6,250 Roger Hcippenot Maurice Perouse France 5,500 5,500 G. R. Kamat J. S. Raj India 4,250 4,250 ELECTED Luis Machado Jorge A. Montealegre Mexico 900 (Cuba) (Nicaragua) Cuba 600 Peru 425 Uruguay 355 Venezuela 355 Costa Rica 270 Dominican Republic 270 4,475 Guatemala 270 El Salvador 260 Honduras 260 Nicaragua 258 Panama 252 Thomas Basyn Hans Kloss Belgium 2,500 (Belgium) (Austria) Austria 750 4,280 Turkey 6804,8 Luxembourg 350 Mohammad Shoaib Ali Akbar Khosropur Pakistan 1,250 (Pakistan) (Iran) Egypt 783 Iran 586 Syria 315409 Iraq 310 4.099 Lebanon 295 Ethiopia 280 Jordan 280 Jorge Mejia-Palacio Alfonso Patino-Rosselli Brazil 1,300 (Colombia) (Colombia) Chile 600 Colombia 600 Philippines 400 4,036 Bolivia 3204,3 Ecuador 282 Haiti 270 Paraguay 2641 .73. APPENDIX L (continued) Executive Directors and Alternates and their Voting Power JUNE 30, 1956 Directors Alternates Casting the Votes by Total ELECTED votes of country votes P. Lieftinck A. Tasic Netherlands 3,000 (Netherlands) (Yugoslavia) Yugoslavia 650 3,945 Israel 295 Takeo Yumoto Boonma Wongswan Japan 2,750 (Japan) (Thailand) Burma 400 Ceylon 400 3,925 Thailand 375 Soetikno Slamet Carlo Gragnani* Italy 2,050 (Indonesia) (Italy) Indonesia 1,350 3,900 Greece 500 Jon Arnason Torfinn Oftedal Sweden 1,250 (Iceland) (Norivay) Denmark 930 Norway 750 3,820 Finland 630 Iceland 260 Otto Donner H. W. Lueck Germany 3,550 3,550 (Germany) (Germany) L. H. E. Bury B. B. Callaghan Australia 2,250 3,500 (Australia) (Australia) Union of South Africa 1,250 Louis Rasminsky J. H. Warren Canada 3,500 3,500 (Canada) (Canada) * Temporary In addition to the Executive Directors and Alternates shown in the foregoing list, the following have also served as Executive Director or Alternate since June 30, 1955: Executive Director End of Period of Service D. Crena de Iongh (Netherlands) September 30, 1955 Alternate Executive Directors End of Period of Service Martin T. Flett (United Kingdom) February 15, 1956 Richard L. Sharp (United Kingdom) March 25, 1956 V. G. Pendharker (India) June 5, 1956 Julio E. Heurtematte (Panama) March 13, 1956 William Tennekoon (Ceylon) October 31, 1955 Felice Pick (Italy) January 20, 1956 Johan Cappelen (Norway) May 3, 1956 .74. APPENDIX M Principal Officers of the Bank EUGENE R. BLACK ............ President W. A. B. ILIF ........F . .................. Vice President J. BURKE KNAPP .......................... Vice President DAVIDSON SOMMERS ........................ Vice President and General Coounsel LEONARD B. RIST GEORGE L. MARTIN Director, Economlic Staff Director of Marketing IRICHARD H. DEMUTH HENRY W. RILEY Director, Technical Assistance and Liaison Staff Treasurer S. R. COPE M. M. MENDELS Director of Operations-Europe, Africa and Australasia Secretary JOSEPH RUCINSKI A. BROCHES Director of Operations-Asia and Middle East Director, Legal Department ORVIs A. SCHMIDT WILLIAM F. HOWELL Director of Operations-Western Hemnisphere Director of Administration SIMON ALDEWERELD HAROLD N. GRAVES, JR. Director of Technical Operations Director of Information BRIAN H. COLQIJHOUN Engineering Adviser This list includes the new appointments made on July 24, 1956, following the appointment of Robert L. Garner as the first President of the new International Finance Corporation. *75. W 0 R L D S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ F )" , 4 r -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~P , i~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4 ..,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~