20080 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION -~ -_______ - -~ .~! . 4 iim 1~~~~~~~~~~# WM t . WORL BANKnJ - f riLE UQ Y WORLD DANK andIDA // N.> . ;; i - ' :;Xa;--y <,,: , / "N /> , R A~~~~~~~~~~~~~~~~~~~~~~~~~~~i N,,v /'N ' ,9 N1> " -2'i . N"~~~~~~~~~~~~~~~Q3 : . . _ _ _~~~~~-, '>,__. ....P_ , _/ _ _: __ __ N)_. ',N ... .... .. .. P , - . , > i ., iT .'. r < . - -z. .< .j F; X t <~~~~~~~ti R gj' iw P~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ AD> . .., :- -7 7, N ._ __ _....... -0 I " A, ~~~~~~~~~~~~~~~~~~~~~~" - -, N- , N -' *' - vy 0,~~~~~~~~~~~, .1 , _ . __ ""'-'N> N, L 'N, 0 -C 00 X / 'N 0, X - kS iS: X --'~'N' -'N x 'N'.t-- , -N -. .N _ ,L 9BL tp6L. ,SBL. _SBL L._ _ . OBL. B6L. Bt_BL __ L ___I.____ * * - - p . X'-, N ,-N-.N >. * '~~~~N " ~ N 'N- i' '- 'N "N [ 'N - ~''i N~-.Sl-5}t->5/ >5rXr~~~~~~~~~M N N N~~~~~~~~~~~~~W`~AN N - " s ~~~~~~them. By the end of June 1966,the Bank Group had | 8 ; ;. <4 ,,^ + @ . ' ~supported 25 such companies in 21 countries with t W } ~~~ * - ,/ s ~~$494 million of Bank loans, IDA credits and IFC Lt. i ./ r s sinvestments. These companies in turn have made 5 t , s ;,^ 1|: _ ~~~~~well over $1,300 million available to new or expand- : . i . { ~~~~~~~~ing industries, have provided technical and mana- -s u W_ _ gerial assistance to their clients, and have helped _f i to support the growth of capital markets through underwriting new issues of industrial securities. teDURING THE YEAR, IFC and the Bank initiated dis- ; A ~ cussions looking toward an effective contribution .;-- - ~~~~by industry to the stimulation of the agricultural l' '_ $494-sector, through projects for the manufacture and distribution of chemical fertilizers in the developing countries. It is widely agreed that a massive expan- An Indian vorkman placing wrenches on a finishing sion in the use of chemical fertilizers is the essential rack at the Hincuustan Dowidat Tools Ltd. plant at short-run means of arresting a serious food crisis. Jatherc in the Punjab. This company is one of many which has received financial assistance from the The technology, economics and financing of the Industrial Credit anc tnvestment Corporation of tndia large-scale manufacture of fertilizer and its distri- Ltd. (ICICI). The World Bank has lent the bution in the less developed countries present highly Aorporation the equivalent of $140 milion to reflenil for industrial Hdevelopment in India. complicated questions. Nevertheless, in discus- sions with manufacturers and governments, prog- ress was made in advancing several proposals toward the point of financing and construction. The Indian enterprises producing commercial vehicles magnitude ls de problem can be appreciated by and automotive components, machine tools and takingthecaseofindia.lntermsofplantnutrients, cutting tools, electrical equipment and heavy con- the facilities in operation in India have a capacity struction equipment to obtain foreign exchange so of 800,000 tons and others under construction will that they could import equipment and supplies increase this capacity byfanother 513,000atons. By needed to utilize more fully and to increase their 1970-71, however, India will require a minimum of existing productive capacity. IDA also extended an 4.1 milliontons of nutrients, and hence the capacity industrialcreditto Pakistan of $25 million tofinance will have to be more than trebled. IFC is active in the import of components and spare parts for com- this field and has been discussing with private in- mercialvehiclestobeassembledindomesticplants. vestors and the Government of India how it could The remainder of the year's financing of indus- help in the establishment of new fertilizer projects. trial development took the form of commitments to The urgency of early action on the problem of pro- increase the resources of industrial finance com- ducing more fertilizers for the developing countries panies. The Bank lent a total of $107.5 million for is suggested by the fact that no sizable fertilizer 10 such companies: five in Colombia and one each plant begun today can be expected to be in produc- in Iran, Israel, Morocco, Pakistan and Tunisia. IFC tion much before 1970. plays the same role in appraising requests for assist- ance to development finance companies on behalf PROGRESS CONTINUED during the year on interna- of the Bank Group as a whole as it does in the case tional agreements intended to encourage the of industrial projects; several of the companies to international flow of private capital by improving the climate for investment. One such agreement is the Council of the OECD prepared a report outlining represented by the Convention on the Settlement a possible international guarantee system. In 1966 of Investment Disputes Between States and Nation- this report was used as the starting point for a first als of Other States, which was formulated by the round of extensive informal discussions by the Bank's Executive Directors and forwarded to mem- Bank's Executive Directors on the basis of which ber governments in March 1965. The Convention a charter for a possible system of multilateral in- provides for the establishment, under the Bank's vestment insurance is being drafted by the Bank's auspices, of an International Centre which will pro- staff. This draft charter is expected to be discussed vide facilities for the voluntary settlement, by con- by the Executive Directors beginning in late 1966. ciliation or arbitration, of disputes between govern- ments and foreign investors. The Convention will FINANCING PUBLIC SERVICES come into force 30 days after 20 governments have The growth of the production and trade of the less both signed it and deposited their instruments of developed countries physically depends on increas- ratification. By August 1, 1966, the Convention had ing supplies of energy, on better transportation been signed by 45 countries and ratified by 11 of networks, and on a steady expansion of the whole them. Procedures for ratification had reached an of the public utilities sector. advanced stage in a number of other countries and Two-thirds of all Bank and IDA lending has been it appeared that the Convention would come into for the development of electric power and trans- force before the end of 1966. portation. In Latin America, for example, the Bank Signatories at August 1, in the order of signing, began lending for power projects in 1948, at a time are shown below. Governments which have depos- when electricity shortages often prevented the full ited their instruments of ratification are indicated use of existing industrial capacity. Since then, the by italics: Bank has been a principal source of external finance for power development in 16 Latin American coun- United Kingdom Japan Cogo tries, where it has made 65 loans for this purpose Jamaica Sweden Germany totaling $1,429 million. In the 14 countries where Ivory Coast Somalia Cyprus Pakistan Sierra Leone Greece the Bank has assisted power development longest, Nigeria Nepal Korea production is now more than double what it was in Mauritania Luxembourg Chad Niger Denmark Austria all of Latin America 20 years ago. Central African Morocco Kenya By now much of the Bank Group's financing is Republic Malaysia Netherlands United States Italy Malagasy Republic to help meet growing demand on power systems Liberia Ghana Uganda that have employed a series of Bank loans over a Dahomey Belgium Malawi Upper Volta France Norway period of years. Colombia has borrowed fourteen Ethiopia Congo Iceland times, Brazil thirteen times, and Mexico eight times Gabon (Brazzaville) for power projects, while Nicaragua has had five loans, El Salvador and Chile four each, and Uruguay PRELIMINARY STEPS WERE TAKEN during the year three. Nine other Latin American countries have toward outlining a multilateral scheme for insuring received one or more Bank loans for power develop- foreign investments against other than normal busi- ment and one, Bolivia, has been extended two IDA ness risks. At the request of the Development credits. The same process is apparent in Asia, Assistance Committee of the OECD, the Bank staff where Japan obtained nine Bank loans for power in 1962 had studied inconsiderable detailthe issues expansion over a period of 12 years, India has bor- involved in establishing such a scheme. In 1964, the rowed seven times from the Bank and three times United Nations Conference on Trade and Develop- from IDA for this purpose, Pakistan and the Philip- ment (UNCTAD) requested the Bank to undertake a pines have had three power loans each and Malaysia further study of ways in which features of national and Thailand two. In Africa a similar pattern is investment guarantee schemes could be adapted emerging. Nigeria, for instance, will by 1969 have to a multilateral approach. In the summer of 1965, a nationwide electric grid with power largely pro- 4~~~~~4 power loan from the Bank, amounting to $22 mi- lion, to help finance its power development program w ,/* ~~~~~~~~~~~~~~for the next three years, adding new generating capacity and transmission and distribution facilities. ii ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~TE BANK AND IDA HAVE LENT more of their re- __ - 4 ~~~~~~~~~~~~sources for transportation than for any other pur- < p.- pose. But the provision of financial resources is only one aspect of their operations in this sector. -~~--. 2... ~~The effective coordination of transport systems and continuous improvements in the efficiency of oper- ational units are vital if increases in the sector's economic returns are to be achieved. For this reason the Bank and IDA pay special attention to these 145_ X~aspects of transportation development in the course of their widely spread lending operations. Bank loans and IDA credits have financed transport proj- 15 e r i f |in r ' wired together atre- site of the new large-scale dam heing built on the ferent countries and territories. They have included Niger River in Nigeria. When completed, this dam, small road projects to facilitate the export of with its associated installations, will be the finals e t o link in the creation ofe nationalpowernetwork.t e and The project is being financed with assistance from leaves from small holdings in Kenya; a ropeway to the Bank. Italy, the Netherlands, the United carry manganese ore 45 miles through the forest Kingdom and the United States. in Gabon to a railhead on the Congo border; por- tions of the Pan American highway in Latin America; the widening and deepening of the Suez Canal; duced and distributed through facilities constructed modern expressways in Venezuela and the world's with the aid of two Bank loans. In Ghana, the Volta fastest railway in Japan; modernization and exten- project has begun to produce power feeding a net- sion of India's railway system, operated at a profit work connecting a large part of the country and an and one of the largest in the world; and construc- aluminum plant now under construction which will tion and improvement of ports and inland water- come into production in 1967. ways in 18dcountries. Amounts involved have ranged Almost one-half of all Bank Group lending for from a few hundred thousand dollars for small power development in the fiscal year 1966 was rep- road projects in various countries to $575 million resented by the single loan of $110 million in Mexico, in a succession of nine Bank loans and three IDA while the second largest lean of the year for this pur- credits for the Indian railways. pose was one of $49 million in Brazil. This was the Of the total of $384 million in Bank and IDA trans- thirteenth loan for power in Brazil since 1949, and portation lending in the fiscal year 1966, $153 ml- increased borrowing for electricity generation and lion was for roads, $141 million for railways, $52 distribution there to $368 million. New Zealand million for ports and $38 million was in a loan to the received a loan of $20.5 million to help construct a East African Common Services Authority to finance thermal station on the North Island; it had also railway and harbor improvements in Kenya, borrowed $32.5 nillion in 1964 for an underwater Tanzania and Uganda. The year's smallest trans- transmission line interconnecting the two islands portation financing was a supplementary road loan across the Cook Straits. The Bank made two loans to Liberia of $1 million, the largest an IDA credit of totaling $30 million for power development in $68 million for the Indian railways. Other trans- Portugal, one for a hydroelectric plant and the other portation loans of the year are shown in the table for a thermal station. Jamaica obtained its first on page 9. TOTAL BANK GROUP LENDING for water supply and to $33.95 million. Since its first financing of educa- sewerage service was raised to $116 million by a tion somefouryearsago,the Bank Group hasmade loan of $21.3 million toVenezuela and an IDAcredit loans and credits for education amounting to $86.1 of $1.1 million to Burundi to improve the water million, virtually all of it being spent on the con- systems of Caracas and Bujumbura. Being one of struction of buildings and the supply of equipment. many essential public services, water supply proj- About half the money has been spent on secondary ects face strong competition for financing. There- education. For instance, during the past fiscal year, fore, if continuous progress is to be made in this a project financed in Ethiopia by an IDA credit of sector, a substantial part of the money will have to $7.2 million will treble the number of students com- be found by the utilities themselves. The Bank and pleting secondary education in that country. In IDA have accordingly always insisted that adequate Morocco, where in 1964 only about 7% of the rates be charged by the utilities to their users so children of secondary school age were attending that savings may be accumulated to finance ex- secondary schools, an IDA credit of $11 million pansion. made during the past year will help to finance the During the fiscal year, the Bank also increased construction and equipment of 21 schools offering its support of projects to improve telecommunica- general and specialized training at the secondary tions, lending $4.8 million to Ethiopia and $37 level. The completed project will permit the enroll- million to Venezuela. This was the third loan to ment of 30,000 more students and thus provide Ethiopia for telecommunications bringing the total trained manpower for all sectors of the economy, to $9.2 million, and the first loan for this purpose increase the supply of university candidates and to Venezuela. make possible the gradual replacement of expatri- ates by Moroccans in various medium and high FINANCING EDUCATION level posts. At least as important as physical infrastructure About a quarter of the Bank and IDA financing are the attitudes and skills which are necessary for to schools has been for projects at the university economicgrowth. Education has a considerable role level, including higher education in engineering and to play in implanting these attitudes and skills. The agriculture. For example, IDA recently extended a Bankitself has been forming a progressivelyclearer second credit to assist the development of tech- picture of the ways in which it can contribute, as a nical education in East Pakistan: the $13 million financial institution and as a source of technical credit will help finance the expansion and improve- assistance, toward improving and enlarging the ment of the East Pakistan Agricultural University supply of skills in the developing world. and of five technical institutes providing technically With so vast a gap between the financial require- trained personnel for Pakistan's growing industrial ments for establishing educational systems in the sector. developing countries on the one hand, and the re- The remaining one-quarter of Bank and IDA lend- sources available to the Bank and IDA for lending ing for education has been divided about equally on the other, it has been imperative to select for between the post-secondarytraining and vocational financing those sectors of education which could training levels. During the past year the Bank lent achieve the most productive impact on the general $2.75 million to Chile to help to finance the building development effort. As a result, the Bank has directed its financing of education toward technical education and vocational training, secondary edu- Ata training center in Kenya an insrructc cation (which, in many countries, is a critical bottle- demonstrates to young African farmers how t clip a young lamb to prevent "foot rot." Ban neck), and teacher training to enable the supply loans and IDA credits are being used by Keny of teachers to keep pace with school expansion at in areas of high agricultural potential. Farmea all levels. are being helped to modernize their holdings an increase the value of their crops through improve Bank and IDA financing of education during the extension services, demonstration farms an year, as shown in the table on page 9, amounted expanded farm loan. and equipping of vocational training centers that provide accelerated training for industrial workers in a variety of skills. The completed program will raise the yearly number of workers currently being trained by such institutes from 16,000 to 30,000 and will meet about three-quarters of Chile's pres- ent need for training of this sort. In the identification, preparation and appraisal of education projects, the Bank continued to have the advantage of assistance from Unesco. In the past year the Bank dispatched 53 missions to member countries, 26 of them in cooperation with Unesco. In the field of agricultural training, FAQ also cooperated in joint missions. At the close of the fiscal year, nine education projects were being appraised with a view to financing in Asia, Africa and Latin America, and many more were entering .Ii & - the pipeline. Already the first fruits of the Bank Group's lending for education are beginning to ap- pear; in Tunisia this year, boys and girls attended classes for the first time in the secondary and tech- nical schoolsfinanced by an IDAcredit of $5 million J ~~~made in September 1962, the Bank Group's first financing of an education project. 41 r ¢4 4 1 t ,> . ** Technical Assistance As; . - 4|t |Most developing countries need technical assis- tance to help them identify and prepare projects, and they may also need assistance in carrying out many other tasks: analyzing their economies, formulating appropriate development policies, establishing effective development institutions, preparing investment programs, studying sector development, listing project and other priorities, determining the feasibility of individual projects or finding solutions to particular problems affecting their development. In the course of the lending |||* * f operations of the Bank and IDA, staff members may be asked to advise on these and other matters; iF i ' ^<.and most of the Bank's technical assistance, now , ! 4 '.+.? ' augmented by its cooperative arrangements with ,: -tt FAO and Unesco, is given in this way. Additional activities, however, are specially budgeted under 'Services to Member Countries." During the year, the Bank increased its emphasis 2 t th* ,~ o ; 8 on assistance in sector development and project W A' -,.;,.. preparation. Some $4.9 million was allocated to pay part of the foreign exchange costs of studies intended to lay the groundwork for detailed plan- Dominican Republic.. Development of Yaque River Basins Nicaragua. Highway and port survey nin ofproect orof ectr dvelpmet. he Nigeria ........Highway development study in west- allocations are summarized in the following table: ern Nigeria Pakistan.. . Telecommunications survey Estimated Bank Share Paraguay ............ Road survey in southern region Country Object of Study of Toea/Cost (U.S.) Somalia .Highway development program - ~Surinam........Survey of mineral resources Brazil Steel expansion program . $ 420,000 Transportation study. Brazil Transport development .1,500,000 Chile Highway improvement .210.000 India Eastern region transport During the latter half of the fiscal year, both the development .285,000 Bank and UNDP adopted new practices in order to Korea Transport developm ent ent4100.bin.aou....... 417,000 b dfe Niger Road maintenance bring about a better division of work on feasibility improvement.... . 84,000 studies. The UNDP, which is the chief source of Turkey Power industry reorganization.. 1,950,000 grant funds for such studies, altered its procedures The total cost of these studies is expected to be in such a way as to permit faster action on applica- about $10 million, of which the equivalent of about tions of interest to the Bank Group; and the Bank $5.1 million will be provided by the domestic decided that it would in future finance such studies authorities concerned. on a reimbursable basis, except in the case of At the request of the Sudan Government, a Bank studies requiring external financing of no more mission has, since August 1965, been reviewing than $200,000, which it would continue to finance the basic concepts, objectives and practices of the on a grant basis. This change in policy is not in- important and very successful Gezira Irrigation tended to minimize or reduce the importance which Scheme. The Bank is bearing the foreign exchange the Bank attaches to sector and feasibility studies, costs of the study, amounting to some $400,000. but simply to facilitate a more appropriate division The mission's report is expected to be presented offunctionsbetweentheBankGroupandtheUNDP. to the Government before the end of 1966. In addition to those project and sector studies MANY OF THE NEW AFRICAN COUNTRIES have a par- which it conducts and helps to finance directly, the ticularly urgent need for technical help in getting Bank has served frequently as Executing Agency projects ready for financing, particularly in the to organize and direct studies financed by grants fields of agriculture and transportation. To assist from the United Nations Special Fund, which during them, the Bank in 1965 established two permanent the year was incorporated into the new United missions in Africa, one in Abidjan to serve the Nations Development Programme (UNDP). During western countries and the other in Nairobi to serve the year, work was completed on three studies the eastern countries. Each mission is composed financed by UNDP: they concerned port siltation of specialists in agriculture and transportation, at Bangkok, hydroelectric resources in the State of and each has had assigned to it a staff member Minas Gerais. Brazil, and the feasibility of a railway I from FAO. to transport iron ore from the interior of Gabon to a The Abidjan mission, now well into its second the Atlantic coast. year, is actively assisting in the preparation of a The Bank agreed to become Executing Agency ! number of projects, and serves as a liaison with for six new UNDP studies, a power development the African Development Bank, which also has its program for the southern region of Brazil, and five i headquarters in Abidjan. The Nairobi mission com- studies in the transport field: road transport in pleted its firstyear, duringwhich it assisted project Guinea and Northern Nigeria; integrated transport preparation in most of the countries in the area. in Bolivia and Sierra Leone; and a railway engineer- The Agricultural Development Service (ADS), which ing study in Gabon, a follow-up of the feasibility is attached to the Nairobi office, has recruited six study already mentioned. In the meantime, work officials who are available for assignmentto African continued on the following UNDP studies: governments, on a reimbursable basis, to assist in Brazil ..... Power development in the south the organization and management of agricultural central region development projects. It is already clear that there is a substantial demand for their services, and an cerned with Bank and IDA operations, in some expansion of the staff is already under way. cases were available for consultation on develop- Apart from advice on specific projects, Bank mis- ment questions. Bank staff members were sta- sions provided a wide range of other advisory tioned in a number of countries to advise on specific services at the request of governments. The second matters, including project preparation in Chile, de- part of a study of the water and power resources velopment planning in Libya, development planning of West Pakistan, financed by the Indus Basin in the Sudan, and the economic policies of the Development Fund, and carried out by a Bank Finance Ministry in Tanzania. Missions to advise team, headed by Dr. Pieter Lieftinck and assisted on a wide variety of specific development matters by a number of consultant firms, neared comple- paid short visits to a large number of member tion. The first part of the study had been completed countries during the course of the year. in February 1965. The Government of Morocco received the report of a survey mission organized THE ECONOMIC DEVELOPMENT INSTITUTE (EDI), a by the Bank to recommend a basis for a long-range staff college for government officials established development program for the country; the report by the World Bank to improve the quality of eco- is being published by The Johns Hopkins Press. nomic management in developing countries, com- The Bank continued its practice of sending com- pleted ten years of service in January 1966. Six prehensive economic missions to its member coun- hundred officials from more than 90 countries have tries. While these missions are intended primarily participated in various courses conducted by the to improve the Bank Group's knowledge of the Institute. development potential and problems of member Until 1962, the EDI offered only an annual six- countries, they also put the Bank in a position to month general course on development, conducted offer advice to member countries, and the reports in English, designed primarily to provide a broad of the missions are made available to governments. perspective of the development process. Since then A Bank mission organized during the previous fiscal several new courses have been added to meet year to review Nigeria's development program sub- special needs. To help improve the techniques of mitted its report to the Government at the end of project identification, appraisal and execution, the 1965. An economic mission to Algeria, the largest Institute now offers courses dealing with evaluation mission ever sent to a single country by the Bank, of projects in the major economic sectors, including completed its fieldwork toward the end of the fiscal special courses on industrial and agricultural pro- year. The Bank also sent an economic mission to jects. In addition, some courses are now conducted Central America to make a comprehensive study of in Spanish and some in French, to meet the needs the development plans of Costa Rica, El Salvador, of countries whose officials cannot readily benefit Guatemala, Honduras and Nicaragua, a group of from courses in English. countries where significant progress has been made in recent years toward economic integration. Economic and Other Studies During the year, discussions were held with the Apart from its assistance to individual member Indian Government arising out of the findings of countries, the Bank also conducts or sponsors an economic mission which had visited India begin- studies which are of broad general interest in the ning in the autumn of 1964 under the leadership field of economicdevelopment. In December 1965, of Mr. Bernard Bell, a consulting economist. Apart the Bank staff completed and transmitted to the from members of the regular staff, the President United Nations another of the studies which it had of the Bank was assisted in these discussions by been requested to undertake bythe United Nations Mr. Andre de Lattre, who had been Director of Conference on Trade and Development (UNCTAD). External Finance in the French Ministry of Finance, The study, "Supplementary Financial Measures," and Mr. Bell, who has now joined the staff. was published at the same time by the Bank. It out- Resident missions stationed in Colombia, Ethi- lined an international scheme to provide supplemen- opia, India and Pakistan, although chiefly con- taryfinance to support development programs that would otherwise be disrupted by the failure of ex- as an important source of export earnings, and of port earnings to come up to reasonable expecta- general interest as a treatment of the problem aris- tions. The UNCTAD Committee on Invisibles and ing from the dependence of less developed coun- Financing Related to Trade established an inter- tries on exports of one or two primary commodities. governmental working group to examine the staff study and prepare a report for further discussion The Bank's Finances by the Committee, with a view to presenting it for Net income for the fiscal year totaled $144 mil- consideration at the next meeting of UNCTAD. The lion, compared with $137 million the year before. Bank has agreed to assist in the additional work Commissions, still charged on the outstanding por- required. Other Bank studies still in progress on tion of a few of the earliest loans of the Bank, behalf of UNCTAD concern the nature, use and amounted to $0.8 million. They were credited to effects on development of suppliers' credits and, the Special Reserve, and raised it to about $290 as mentioned earlier in this Report, the feasibility million at June 30, 1966. of a multilateral system of investment insurance. Gross income was $292 million, compared with In December 1965, The Johns Hopkins Press $268 million for the previous year. Bond and note published for the Economic Development Institute interest and issuance expenses were $118 million, a book entitled "Development Planning-Lessons an increase of $10.6 million. Administrative costs of Experience," a study of the organization of de- rose by $3.7 million to $21.5 million. Expenditures velopment planning, based on the experience of for services to member countries totaled $8.3 mil- more than 100 countries, both developed and lion, an increase of $3.7 million; these funds were underdeveloped. The author is Albert Waterston, spent for economic surveys, project and sector who was assisted by other members of the Bank studies, training programs for officials of the less staff. Mr. Waterston has since continued to serve as adviser on development planning organization, and, on request, has visited member countries to provide advice. During the fiscal year he visited COMMITMENTS AND DISBURSEMENTS Colombia, Afghanistan, Thailand, Ceylon, Malaysia, Singapore and Ghana for this purpose. Expressed in millions of U.S. Dollars Two Bank studies concerned agriculture. A study IDA COMMITMENTS 1,200 of experiences in the development of agriculture BANK COMMITMENTS in tropical Africa was completed; it contains a syn- 1,000 thesis of findings, many of which are applicable to IDA DISBURSEMENTS agricultural development generally, and extensive I BANK DISBURSEMENTS case histories drawn from both western and eastern IReflecting only IDA's first yer 800 Africa. It will be o~~~~~~~~~~~~f oper.t ons (1961). in ehics Africa. It will be published in 1967 by The Johns - con1;_nit_t-ncn,srf 4$lo0ino000jOoo Hopkins Press, under the title, "Experiences with were made Agricultural Development in Tropical Africa." The 600 author is John C. de Wilde; he was assisted by other members of the staff and by outside consultants. Together with FAO and the International Coffee 400 Organization, the Bank inaugurated a study which will examine the needs of ten coffee-producing countries to diversify into other lines of production 200 in order to build greater economic strength and stability, and will try to identify the possibilities that these countries have for economic diversification. 1941-1951 1952-1956 195-1961 1962-1966 0 The study will be of specific interest to countries FIVE YEAR AVERAGES FISCAL YEARS in Latin America and Africa that depend on coffee I developed countries and other technical and ad- I to the United States Interest Equalization Tax and visory services. the guidelines of the U.S. balance of payments Loans held by the Bank at June 30, including program. Sales for the year totaled $82 million, a those not yet effective, and net of exchange adjust- reduction of $24 million from the previous year; ments, totaled $6,528 million, an increase of $561 sales from portfolio accounted for $72 million, and million. Disbursements during the year amounted the balance of $10 million represented participa- to $668 million, compared with $606 million for tions by investors who agreed to take up parts of 1964/65. loans at the time loan agreements were signed. Repayments of loans totaled $328 million, which The Bank's funded debt increased during the was $28 million more than the year before. Of this fiscal year by $82 million; at June 30, 1966, the sum, $166 million was repaid to the Bank, and total of bonds and notes outstanding was $2,806 $162 million was repaid to investors holding matur- million. The increase reflected a private placement ing portions of Bank loans. This brought cumulative I outside the United States of $100 million of 51/4% repayments to $2,214 million, including $1,075 Two-Year Bonds sold in March 1966 to central million to the Bank and $1,139 million to pur- banks and governmental institutions in 22 coun- chasers of its loans, while the cumulative total of tries and to one international organization, a public loan sales reached $1,967 million. borrowing in Canada of Can$ 20 million (equivalent Sales of loan maturities, however, declined for to US$ 18.5 million) and the issuance of $17.9 /i the fourth successive fiscal year, under the impact million of bonds under delayed delivery arrange- of risingyields on other securities, the Bank's policy ments. (In the final week of the fiscal year the Bank of not selling in the United States market portions successfully offered a new issue in the United of loans to countries whose securities are subject States of US$ 175 million of Twenty-five Year 53/8% Bonds, but delivery of the bonds did not occur until after the close of the fiscal year, and the issue is not, therefore, reflected in the funded debt figure IDA FUNDS COMMITTED AND FUNDS AVAILABLE for the year.) Exprsse imillions of U.S. Dollars Maturing bonds and notes totaling $164 million TOTAL FUNDS millions 1,800 were refunded during the year. The Bank refi- ____TOTAL FUNDS AVAILABLE ,0 nanced at maturity notes totaling $44 million and t . .t. . FUNDS UNCOMMITTED , . . -1,600 Deutsche mark 80 million (equivalent to US$ 20 FUNDS COMMI1TTED / . l,million) which matured on August 1, 1965 and 1,40C February 1, 1966, and borrowed an additional amount equivalent to $5.5 million by issuance of 1,200 new notes totaling $34.75 million and DM 139 mil- lion (equivalent to US$ 34.75 million) with maturi- : ooc ties in 1968 and 1971. Of these amounts, notes for $18.75 million and DM 75 million were issued on 800 August 1, 1965, with an interest rate of 41/4% and $16 million and DM 64 million were issued on 000 February 1, 1966, with an interest rate of 47/8%. Another issue of $100 million of 4% Two-Year Bonds 400 Ifell due on September 15, 1965, and was refunded through the placement of an equal amount of 43/8% 20 _ _ 1Two-Year Bonds with central banks and govern- mental institutions outside the United States in 1961 1962 1963 1964 1965 1906 28 countries and one international organization. FISCAL YEARS (CUMULA-IVE) During the year the Bank paid off a maturity of Sw F 50 million (equivalent to about US$ 11.6 mil- Constructing a new highway through the Loboguerrero Canyon, north of Cali in Colombia. This is one of the most difficult terrain for the new road from the interior to the port of Buenaventura. Since 1949 World Bank loans and an IDA credit have enabled Colombia to modernize and expand virtually its entire highway system. lion) of a 33/4% loan made to the Bank by the Swiss IDA's 96 member countries are divided into two Government in 1961. In addition, net sinking and categories: eighteen high-income members (called purchase fund operations retired the equivalent of Part 1 countries) pay their subscriptions in con- $48 million in Bank obligations. vertible currency which is freely available for IDA The issue of Can$ 20 million in 53/4% Twenty-five credits; the remaining members (called Part II Year Canadian dollar bonds was made in February countries) pay only one-tenth of their subscriptions 1966 and was the fifth World Bank issue in Canada in convertible form and the rest in their own cur- and the second within two years. The bonds were rencies, which may be used in the Association's offered by a large group of investment dealers and lending operations only with their consent. The banks headed by A. E. Ames & Co. Limited, Wood, original convertible resources of IDA have been Gundy&Company Limited and Dominion Securities replenished by a round of supplementary contri- Corporation Limited. butions from Part I members, by releases of local In February 1966, the Bank raised from 51/2% to currency subscriptions by Part II countries, by net 6% its interest rate on new loans to the less devel- income earned, by supplementary contributions oped countries, reflecting the higher price which from Sweden and bytransfers bywayof grantsfrom the Bank itself was having to pay for its borrowings the Bank out of its net income. During the fiscal in the capital markets. In the previous fiscal year year, the Governmentof Yugoslavia announced that it had been decided that the more developed coun- it would release the nine-tenths portion of its sub- 23 tries amongst the Bank's clients who were able to scription to IDA and would make the amount, over satisfy most of their external capital needs from $3.6 million, available in convertible currencies in market sources should be charged rates on Bank three equal annual installments beginning in 1968. loans up to 1% higher than the prevailing standard The accompanying table shows the composition of rate. With the setting of a new standard rate, loans the Association's usable funds from the start of to countries falling into this special category would operations in 1960 to the end of June 1966. bear rates of up to 7%. Under a decision approved by the Board of Gov- (MilUAonsDof U.S. ernors at its Annual Meeting in September 1965, DollarEquivalents) $75 ~~~~~~~~~~~~~~~Subscriptions ................ $ 784 $75 million of the Bank's net income for the fiscal Part I Countries (100% of Subscriptions).. $751 year 1964/65 was set aside for transfer to IDA in I Part II Countries (10% of Subscriptions).. 25 the form of a grant, after $62 million from net Part 11 Countries (Releases in Convertible Form of All or Part of their Local Cur- income was allocated to the Supplemental Reserve. rency Subscriptions) ... ............... 8 After the close of the 1965/66 fiscal year, the Part I Contributons to768 Executive Directors allocated $68 million to the First Replenishment) .745 Reserv from et incme for1965/ Sweden (Five Special Supplementary Con- Supplemental Reserve from net income for 1965/ tributions in Addition to Replenishment) 23 66, raising that Reserve to $731.6 million, and World Bank Transfers .125 recommended to the Board of Governors that the Cumulative Net Income .10 balance of $75 million of that year's net income be TOTAL . $1,687 transferred to IDA by way of a grant. After the close of the fiscal year, the Bank's Ex- ecutive Directors recommended to the Board of IDA's Finances Governors that a third grant to IDA in the amount During the fiscal year, IDA's commitments I of $75 million be made out of net income for the amounted to $284 million, reducing the Associa- year; and the Presidentof IDAsenttothe Governors tion's uncommitted resources to $322 million. The representing capital-exporting member countries cumulative total of usable funds that have so far a proposal for the replenishment of the resources been made available to IDA amounted at the end of IDA. The proposal would enable IDA to increase of the fiscal year to $1,687 million, and the cumu- its rate of commitment, although payments under lative total of the Association's commitments stood the replenishment would not actually begin until at $1,365 million net of cancellations. the fiscal year 1970. Actual disbursements by IDA reached a cumula- Ministry of Overseas Development. His resignation tive total of $682 million, including $267 million became effective shortly after the close of the disbursed in the fiscal year ended June 30, 1966. fiscal year. Mr. Michael L. Hoffman, who had resigned to Membership and Administration i join a private investment firm in 1963, returned At the close of the fiscal year, the Bank's sub- in September 1965 to the post of Associate Director scribed capital was $22,426 million, and 103 gov- of the Development Services Department. ernments were members. Malawi and Zambia Mr. David L. Gordon, who had been Deputy Dir- joined the Bank and Indonesia withdrew during ector of the Development Services Department, the year. Malawi and Zambia also joined IDA, in- became Chief of the Permanent Mission in eastern creasing its membership to 96; Indonesia had not Africa with headquarters in Nairobi, Kenya. Mr. been a member of the Association. Action was Alfred E. Matter, who had been Deputy Director of pendingon applicationsfor membership inthe Bank the Western Hemisphere Department, became from Guyana. the Gambia and Malta and also for Chief of the Permanent Mission in western Africa, membership in IDA from Guyana. Shortly after the with headquarters in Abidjan, Ivory Coast. end.ofthefiscalyear, anapplicationforreadmission Mr. John D. Miller, Director of the European to membership in the Bank was received from Office, was designated Special Representative in Indonesia. Singapore became the 104th member Europe with broader responsibilities for maintain- of the Bank on August 3, 1966. ing contact with member countries in Western Malawi's subscription to the Bank is $15 million Europe. Mr. Arthur Karasz, who had been Assistant and to IDA $760,000. Zambia's subscriptions are Director of the European Office, was made Deputy $53.3 million to the Bank and $2.69 million to IDA. Special Representative with additional responsibili- In addition, 20 governments increased their sub- ties as Manager of the European Office. Mr. Harry scriptions to the Bank's capital by a total of $909 G. Curran, Deputy Director of the European Office, million, as follows: retired on April 1, 1966. _________________ The first three groups to be appointed under the Member From To(Millions) Program for Selecting Young Professionals (for- Austria. $ 10 $ 186.7 merly known as the Junior Professional Program) Ceylon 60 82.7 have completed the program and are now assigned Finland .............. 76 133.3 to regular positions on the staff of the Bank and Germany ............. 1,050 1,280 Guatemala ............ 8 10.7 the International Finance Corporation. Two addi- Iran ..............o90 128.6 tional groups numbering 34 are in training and the Iraq .............. 15 55 sixth group of 17 will come into the Bank in October Ireland ... . ... 60 85.3 Israel .............. 66.6 95 9 1966, bringing the total to 82 recruits from 32 Jamaica .............. 26.7 32 countries. Countries represented in the program Japan .............. 666 772.6 and the number of professionals from each are: Jordan ...... ....... 15 16.3 Mexico ........ ...... 173.3 208 Norway .............. 133.3 160 Argentina ..... 2 Netherlands .. ...... 1 Saudi Arabia .......... 73.3 96 Austria ... 2 New Zealand ....1... _ 1 South Africa .......... 200 213.3 Belgium.3 Nicaragua 1 Spain .............. 200 266.7 China ... 1 Norway ...... . 2 Sweden .............. 200 240 Colombia ... 1 Pakistan ....... 3 Thailand .............. 60 101.3 Cuba. ........ 1 Philippines 2 Uruguay .... . 10.5 28 France .8 South Africa 1 Germany .7 Spain .. 2 Ghana . . 1 Sweden ............. 2 AT THE END OF JUNE 1966, the staff of the World Greece .2 Switzerland ........ 4 Ba n k a nd I DA numbered 1,326, comprising na- Irnda ... I5 Tohgoand 1 tionals from 68 countries. Israel ........ 1 Turkey. 1 Mr. Geoffrey M. Wilson, Vice President, resigned J aaica .51 United states K07 to become Deputy Secretary in the United Kingdom Japan ...... 1 Yugoslavia .1 ~~~ __ ,I. /~~~ A modern harvester reaps sorghum in an irrigated field A+ ~~~~~~~~~~~~~~~~~~~~~~~reclaimedY from desert land in Iran. Part of the pilot Des Multi-purpose scheme in ._Khuzestan, ths sproject, with the help of a World Bank loan, F has raised living standards for 12,000 villagers who formerly 7- < _5 X lived in the area under primitive f /- . ' s conditions. apt Two TRENDS AND OUTLOOK IN DEVELOPMENT FINANCE page 1. OVER-ALL DEVELOPMENTS IN THE WORLD ECONOMY AND IN DEVELOPING COUNTRIES ............................. 28 World Production, Trade and Finance ........................... 29 Trade and Reserves of Developing Countries ................... 30 26 11. EXTERNAL DEBT OF DEVELOPING COUNTRIES AND TERMS OF AID ........................................... 33 Debt Accumulation and Servicing ............................... 33 Terms of External Assistance ................................... 35 111. EXTERNAL FINANCE FOR DEVELOPING COUNTRIES .......... 37 Official Development Assistance ................................ 37 Private Capital Flows ............................................ 39 International Capital Markets ................................... 40 Assistance from Non-industrial Countries ....................... 43 IV. OUTLOOK .44 LIST OF TABLES page 1. Gross Domestic Product and Industrial and Agricultural Output by Areas ....... 29 2. Trade Balance of Developing Countries .. . . 32 3. Estimated Service Payments on External Public Debt 27 of 97 Developing Countries . 33 4. Total Outstanding External Public Debt (I ncluding Undis- bursed) of 97 Developing Countries as of December 31, 1965 .... 33 5. Selected Debtors: Outstanding External Public Debt (Including Undisbursed) 1955-65 .................. 33 6. Weighted Average Terms of External Public Debt of 34 Developing Countries . . .... 35 7. Weighted Average Terms of External Public Debt Incurred in 1960 by 34 Developing Countries .. 36 8. Weighted Average Terms of External Public Debt Incurred in 1964 by 34 Developing Countries 36 9. Weighted Average Terms of External Public Debt of 34 Developing Countries by Various Sources in 1960 .37 10. Weighted Average Terms of External Public Debt of 34 Developing Countries by Various Sources in 1964 37 11. The Flow of Financial Resources from IDA Part I Members to Developing Countries and Multilateral Institutions .38 12. Issues Placed Internationally by Developing Countries and Multilateral Development Institutions .. . 41 1. OVER-ALL DEVELOPMENTS IN from disequilibria in the balance of payments of THE WORLD ECONOMY AND IN major industrial countries have adversely affected the volume, form and terms of development assist- DEVELOPING COUNTRIES ance, despite the fact that the need for additional On balance, world conditions were not favorable for aid is small compared with the gross national prod- satisfactory growth of the developing countries' in uct, savings and investment, budgetary expendi- 1965, despite various encouraging trends which tures or capital exports of the industrial countries. continued through the first half of 1966. Adverse The total flow of official bilateral aid has remained factors included political turbulence and interna- virtually constant for the last five years, while the tional conflict, balance of payments difficulties in average terms of all assistance combined have some of the major industrial countries and budget- become harder. The level of aid from the United ary and capital shortage constraints in others, lag- States has not changed significantly during this ging food production, a rising level of debt service period,whileaidfromthe United Kingdom increased payments and slower growth in export earnings of in 1964, then levelled off in 1965. Certain countries the developing countries, together with continued in continental Europe, which have had surpluses in inadequacy of the flow of external official assist- their balance of payments, have been slow to in- ance for development. crease assistance because of budgetary considera- Some of these difficulties have focused attention tions. As a result of competing calls on public funds on the need for constant improvement in the eco- for external and domestic purposes, budgetary nomic performance of the developing countries. limitations on aid became more stringent even in This has been a continuing concern of the World the United States in the latter part of 1965 and the Bank, which regularly makes an assessment of the first half of 1966. In addition, the common practice economic position, policies and prospects of each of tying aid to purchases in the donor country has borrowing member country. Each proposal for a been accentuated, thus tending to reduce the value Bank loan or IDA credit is considered in the context of assistance by limiting competition among sup- of this assessment. Often, at the request of govern- pliers. ments, the Bank also conducts comprehensive stu- Difficulties in raising the level of official assistance dies of economic sectors or entire economies and were augmented in the fall of 1965 by armed con- makes recommendations on investment programs, flict between two of the largest developing coun- economic policies and administrative measures for tries-India and Pakistan. The hostilities not only the most efficient mobilization and use of resources. consumed scarce resources of the countries in- The Bank's concern is not only to assure that its volved, but also led to increased resistance in the lending is sound, but also to help its less developed donor countries to augmenting external financial members overcome economic difficulties within resources for development. their control, maKe them more attractive areas for While the level of official bilateral aid has not private investment, and strengthen their eligibility changed, private capital flows to the developing for the external assistance they require, in order to countries have increased in the last two years; but advance their economic growth. the beneficiaries of these flows, especially of direct By no means all of the problems of development, investments, have been a small number of coun- however, can be solved by the developing countries tries, chiefly petroleum exporters. Income pay- themselves. Additional resources from the indus- ments by the developing countries on private in- trial countries are vital. However, difficulties arising vestments continued to increase, and in both 1964 and 1965 they may have exceeded the total inflow I Unless otherwise specified, the terms developing countries and a industrial countries as used in this part of the Report do not in- I of private capital. clude any of the so-called Sino-Soviet countries. Developing countries include all other countries of Asia except Japan, of Some of the basic obstacles to raising the level of Africa except South Africa, of Southern Europe except Italy (Turkey, Yugoslavia, Cyprus, Greece, Malta, Spain and Portugal) development finance, both in the form of external and of Latin America and the Caribbean area except Cuba. The I group covers some 1600 million people or more than 70% of the assistance and in domestic savings and export world's population outside the Sino-Soviet countries. All others o are referred to as industrial countries. i earnings of the developing countries, pose ques- tions of national and international priorities. Action at an over-all rate of 5%(Table 1). For the industrial to help spur the economic growth of less developed countries as a whole GDP also rose by some 5%, countries stands high among the stated objectives about the same rate as in every year since 1960. of virtually all industrial countries. In almost all of This expansion, however, resulted chiefly from the developing countries themselves, economic unusually rapid growth in the United States, where growth is accorded a place at the very top of the i GDP increased by 5.5% in real terms and the rate official priority list. Yet in many cases there is often continued to accelerate during the last quarter of a considerable gap between expressed policy and 1965 and the first months of 1966. actual performance. Part of this gap can be closed The United States' experience was in contrast to by the developing countries themselves through that of several major countries of Western Europe closer adherence to sound economic policies, more and Japan, where growth was considerably cur- efficient mobilization and use of resources, greater tailed. Japan's economy, which had been growing emphasis upon increasing and diversifying produc- at the exceptionally high rate of 10% per year, tion and exports, more attention to improving the slowed down to about 3.5% in 1965. In the United efficiency of agriculture, and avoidance of all poli- Kingdom, France and Italy, GDP increased by only cies and actions which, however attractive in the 2% to 3.5%, compared with over 5% in 1964. short run, impede their economic growth. In part, Germany's GDP rose by about 5%, somewhat below however, the causes of the variance between inten- /Q tions and practice in giving priority to development TABLE 1 are found in problems which can be solved only GROSS DOMESTIC PRODUCT AND INDUSTRIAL through cooperative international action-problems AND AGRICULTURAL OUTPUT BY AREAS beyond the control of the developing countries but (percentage change from preceding year) which strongly affect their export earnings and the volume of external assistance. In addition to helping Gross Domestic Industrial Agricultural Output its developing members wherever it can in solving Product Output Gross Food their internal development problems, the World World(a) Total Per Total Per Total Per Total Per Bank has been searching for practical solutions at Capita Capita Capita Capita the international level, in cooperation with other 1961 ..... 4 2 6 4 2 - 2 - national and multilateral agencies. 1962 ..... 5 3 8 6 4 2 3 1 1963 ...... 4 2 6 4 3 1 2 - WORLD PRODUCTION, TRADE AND FINANCE 1964 ..... 5 3 7 5 2 - 2 - Prospects of the developing countries are strongly 1965 ..... 5 3 7 5 2 - 2 - affected, of course, by trends in world production, Industrial Countries trade and finance. In 1965 and the first half of 1961 ..... 4 3 4 3 2 1 2 1 1966, the expansion that has characterized world 1962 ..... 5 4 7 6 5 4 4 3 production and trade since 1960 continued, al- 1963 ..... 5 3 5 4 3 2 2 1 though international trade increased at a slower 1964 ..... 6 5 7 6 2 1 2 1 pace in 1965 than in the two previous years of 1965 ..... 5 4 7 6 2 1 2 1 exceptional growth. The slowdown in exports began Developing in the second half of 1964, and was more accentu- Countries ated for the developing than for the industrial 1961 . 5 3 9 7 3 1 3 1 countries. The trend turned up again in the latter 1962. 4 2 7 5 2 - 1 -1 part of 1965 and the first half of 1966. On a global 1963 . 4 2 6 4 2 - 1 -1 basis, trade expanded by about 8% in 1965, as I 1964 . 5 3 7 4 3 1 2 - compared with the exceptionally high rate of 121965. 4 2 7 5 2 - 1 -1 (a) Including Soviet countries and mainland China, except for in 1964 and the average increase of 7% for the Gross Domestic Product. All figiures are rounded to and indicate broad trends one. period 1957 to 1963. SOURCES: United Nations, World Economic Survey, 194; U.N. i Monthly Bulletin of Statistics; F.A .O. and other U.N. sources; World gross domestic product (GDP) grew in 1965 U.S. Department of Agriculture. the rate of previous years. The deceleration in about 9.5% in 1964 over 1963. In 1965 the rate Western Europe and Japan resulted from restrictive decreased to 7%. This, however, was still above government policies designed to contain inflation- the average annual increase of only 4.3% for the ary pressures generated by the earlier rapid expan- 15 years 1950-65. sion. Such policies were revised toward the end of Compared to the rate of growth of world trade as 1965 by Italy and Japan, and to a certain extent by a whole, however, the growth of exports of the France, in order to encourage recovery in the level developing countries has lagged substantially and of domestic production; in the first half of 1966, almost continuously. This has been due chiefly to there were signs of a return to fairly rapid rates of the predominance of primary products in the devel- growth. oping countries' exports. As recently as the period While the per capita GDP of the industrial coun- 1962-64, almost 85% of the export earnings of the tries increased in 1965 by about 4%, that of the developing countries were derived from primary developing countries as a group rose by only goods,whilethesamegroupofproductsaccounted about 2%. for only about 44% in value of total world merchan- As might be expected, the fastest increase in dise trade. Manufactures, on the other hand, ac- world production during 1965 was in the industrial counted for about 56% of total world trade, but for sector. In contrast, growth in world agricultural pro- only 15% of the export earnings of developing /D duction, which for several years had barely kept countries. pace with the increase in population, slowed down For primary products the growth in volume of still further and actually lagged behind in 1965. both world consumption and international trade has This was due to a decline in agricultural production tended to be relatively sluggish. In addition, the in Eastern Europe as well as to inadequate expan- longer term trend in prices of primary commodities sion in the Soviet Union and the developing coun- has shown a gradual decline. In the 10 years 19533 tries. Food requirements of the developing coun- to 1963, the world's export volume of primary tries as a group have been increasingly supplied by commodities grew at around 5.3% per year, while imports from the developed countries, especially the price level dropped about 4% over the period the United States, Canada and Australia. as a whole. Manufactured products on the other A major development in 1965 and the first half of hand grew in volume at 6.8% per year, with the 1966 was a general rise in interest rates in Europe price level at the end of the period about 8%o higher and North America, where rates for long-term gov- than at the beginning. ernment bonds reached their highest levels since The deceleration in export earnings of the devel- the 1920's. The upward trend in the U.S., which be- oping countries in 1965 was due primarily to a gan inthesecond half of 1965, reflected a risingand slowdown in growth of volume rather than a fall of extraordinarily strong demand for funds, mainly for prices, although prices did decline in the primary private investments, without a corresponding in- commodities sector. The World Bank's primary crease in supply. In Europe, higher interest rates commodities price index for low and medium in- resulted mainly from a rise in demand for capital come countries declined about 6% from the aver- on the part of the public sector; a secondary factor age of 1964 (see Chart I ). At the end of 1965, how- was a reduction in the flow of U.S. capital to Europe, ever, the index returned to the level it had reached which has been restrained to reduce the deficit in at the end of 1964 and continued to rise in the first the overall U.S. balance of payments. half of 1966, mainly because of the continuing rise in the price of copper and the stronger position of TRADE AND RESERVES OF grain and some tropical products. DEVELOPING COUNTRIES For exports of the developing countries2, 1965 was 2Thefigures on trade and reserves in the following section of the Report exclude Spain because the very rapid growth in its imports a relatively good year. Between 1962 and 1964 and the extreme changes in its payments position would have concealed the trends of other developing countries. their export earnings grew at an increasing rate IrAs of 1953, primary commodity prices on the whole had re- treated from the 1951 Korean war peak, and were at about the that averaged almost 9% per year and reached 1950 pre-war level (see Chart 1). CHART I PRIMARY COMMODITY PRICE INDEX FOR LOW AND MEDIUM INCOME PRIMARY PRODUCERS (1955-1957=100) 160 ANNUAL AVERAGES 140 * . 120 3',, 1/ 7't 1, ________ _______ ~~~~~~80 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 -- TOTALt - AGRICULTURAL - NON-FERROUS METALSt (2nd 'including petroleum. tFrom 1962 adjusted to reflect producers price quotations of copper. Of course, different products have fared differ- was a certain amount of support for both volume ently and this has been reflected in variations in and prices in international trade in ferrous and the growth of exports of individual developing coun- ferrous-alloy minerals. For some of the non-ferrous tries. On the basis of price movements, developing and non-metallic minerals (except petroleum), sup- countries dependent primarily on agricultural prod- ply difficulties were a constraint on the potential ucts, particularly coffee, tea, cocoa, sugar and growth of trade volume, but they were more than fibers, fared worse in 1965 than those dependent offset by the consequent increase in price levels, on minerals, but the relative position of some of especially in the case of copper and tin. these commodities strengthened in the early part Variations in developing countries' export earn- of 1966. The more modest growth of industrial out- ings from food products appear to have been deter- put in Europe and Japan in 1965 was accompanied mined in 1965 by supply rather than by changes in in Europe by a decline in textile production. These demand. Thus, short crops of some vegetable oils factors undoubtedly had an unfavorable effect on in both the developed and developing countries both the export trade volume and prices of agricul- resulted in higher prices, although the export vol- tural raw materials from developing countries. ume of vegetable oils from the developing countries On the other hand, the effects of the slower as a group declined only slightly in 1965 after rising growth of European manufacturing in 1965 were in 1964. Meat export prices also rose because of offset by a continuation of the remarkable boom in short supplies. On the other hand, cocoa, sugar and consumer durables in the U.S. Consequently, there coffee, the most important agricultural exports of the developing countries, showed price weakness part, it reflected net payments of income on invest- because of oversupply. The operation of the Inter- ments in the form of interest and dividends (includ- national Coffee Agreement helped to maintain ing reinvested earnings), estimated at more than prices of coffee above the average of the early $4 billion. Most of the deficit on invisibles is due to 1960's, although there was a drop in export volume large payments of investment income by the petro- from the 1964 level. leum exporting countries. The developing countries Imports of the developing countries as a whole also had a deficit on expenditures for transportation increased by only 4.5% in 1965 compared with 9% (in addition to freight costs included in figures for in 1964 and 5% in 1963. Most of the slowdown was merchandise imports), and a surplus on military experienced in Latin America and the Middle East, and government services and tourism. Excluding imports of which remained on virtually the same petroleum exporters, the overall deficit on invisibles level as in the previous year. On the other hand, the of the developing countries is estimated at about developing countries in Africa and Asia raised their $250 million in 1965. imports in 1965 by 7.5% and 5.5% respectively. The reserve position of the developing countries The relatively slow growth of imports has been a as a group continued to improve in 1965. Their major factor in the gradual decline of the combined combined reserves increased by some $600 million trade deficit of the developing countries from an in 1964, $1.4 billion in 1965 and $300 million in average of more than $4 billion a year during 1960 the first quarter of 1966, nearly all in dollars or J 2/ to 1962 to about $2.5 billion during 1963 and 1964 sterling. The added reserves of the developing coun- and to some $2 billion in 1965 (Table 2). The trade tries(exceptforverysmall amountsincertainSouth- deficit of the developing countries as a group, ern European countries) were not converted into however, is greatly reduced by the inclusion of official gold holdings in 1965 or the first half of major petroleum exporters with a larger trade sur- 1966. These increases in reserves were partly the plus. Excluding them, the combined trade deficit result of special factors, such as the non-recurring was $7.3 billion in 1965, about the same as the receiptsof certainoil-exportingcountriesin the Mid- average for the years 1960 to 1964. dle East, following renegotiation of contracts. Other The developing countries also had a deficit on increases in reserves were concentrated in a few invisibles in 1965 of about $3.3 billion. For the most countries, such asArgentina, Brazil, India and Israel. TABLE 2 TRADE BALANCE OF DEVELOPING COUNTRIES (Billions of U.S. Dollars) 1966 1960 1961 1962 1963 1964 1965 First Quarter (Annual Rate) Developing Countries(a) Exports (fob) .......... 27.5 27.8 29.6 32.2 35.3 37.8 38.7 Imports (cif) .......... -31.5 -32.5 -33.2 -34.8 -37.9 -39.7 -39.7 Trade Balance ........ - 4.0 - 4.7 - 3.6 - 2.6 - 2.6 - 1.9 - 1.0 Excluding Major Petroleum Exporters(b) Exports (fob) .......... 21.7 22.0 23.0 25.4 27.4 29.4 30.3 Imports (cif) . ......... -28.7 -29.7 -30.4 -32.2 -34.8 -36.7 -36.6 Trade Balance ........ - 7.0 - 7.7 - 7.4 - 6.8 - 7.4 - 7.3 - 6.3 (a) Including Southern European developing countries otherthan Spain; See note 2. (b) Iran, Iraq, Kuwait, Libya, Saudi Arabia and Venezuela. SOU RCE: International Financial Statistics, I M F. 11. EXTERNAL DEBT OF TABLE 3 DEVELOPING COUNTRIES AND ESTIMATED SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OF 97 DEVELOPING COUNTRIES TERMS OF AID (BILLIONS OF U.S. DOLLARS) South Asia Total DEBT ACCUMULATION AND SERVICING and as%of Latin Middle Far Southern Merchandise While debt accumulation of the developing coun- America East East Africa Europe Totaf Exports tries as a group slowed down in 1965, their service 1960 .. 1.4 0.4 0.1 0.1 0.3 2.3 8.1 payments on previously contracted debt rose 1961 .. 1.3 0.4 0.2 0.1 0.3 2.3 8.2 sharply in 1964 and continued to rise in 1965. The 1962 .. 1.3 0.5 0.3 0.1 0.2 2.4 8.4 total service payments (interest and amortization) 1963.... 1.3 0.5 0.2 0.2 0.3 2 .5 7.5 on public and publicly-guaranteed debt of 97 de- 1964... 1.7 0.7 0.2 0.3 0.4 3.3 9.2 veloping countries4 rose from an average of $2.4 1965. 1.7 0.8 0.3 0.3 0.4 3.5 9.0 billion in 1962 and 1963 to $3.3 billion in 1964 and SOURCE: World Bank $3.5 billion in 1965 (Table 3 and Chart I I). The most TABLE 4 rapid increase in recent years was in Latin America, TOTAL OUTSTANDING EXTERNAL PUBLIC DEBT where debt service in 1965 absorbed about a sixth (INCLUDING UNDISBURSED) OF 97 DEVELOPING of export earnings. As a percentage of merchandise COUNTRIES AS OF DECEMBER 31, 1965 33 exports, the total debt service of the developing (BILLIONS OF U.S. DOLLARS) countries increased from an average of about 8% Disbursed Undisbursed Total in the years 1960 to 1963 to 9% in 1964 and 1965. All Areas .................. 27.3 9.1 36.4 The rise in debt service during recent years Latin America .............. 9.4 2.5 11.9 reflects the increase in debt outstanding several South Asia and Middle East. 8.5 2.8 11.3 years in the past; because of grace periods, there Far East .................... 2.5 2.0 4.5 is a considerable time lag between changes in Africa ...................... 4.0 1.0 5.0 terms of new debts and their impact on the volume Southern Europe ........... 2.9 0.8 3.7 of service payments. The total outstanding external SOURCE: World Bank debt of the developing countries4 is estimated at TABLE 5 about $36.4 billion in 1965 (see Table 4), compared with $33 billion in 1964, $29 billion in 1963 and SELECTED DEBTORS: OUTSTANDING EXTERNAL only $10 billion in 1955. Thus, it increased by about 1955I1965(a) 10% in 1965, compared with a compound rate of (BILLIONS OF U.S. DOLLARS) about 14% between 1955 and 1964. 1955 1963 1964 1965(b) The slowdown in debt accumulation was concen- trated in Latin America, Southern Europe and the India .............. 0.4 3.8 4.7 5.2 Far East, while the combined debt of countries in Brazil .............. 1.4 2.3 2.8 3.0 South Asia and Africa continued to increase at a Pakistan ........... 0.1 1.2 1.8 2.1 rapid rate (see table 5). Argentina .......... (0.4) 2.1 1.9 1.9 The slower rate of increase in total indebtedness Mexico ......... ... 0.5 1.6 2.0 2.1 resulted in part from greater caution exercised by Turkey ............. (0.2) 1.0 1.2 1.2 some countries, chiefly in Latin America, in assum- Yugoslavia ......... 0.3 1.1 1.3 1.2 Chile .............. 0.4 0.9 1.0 1.1 Colombia .......... 0.3 0.8 0.9 1.0 Israel .............. (0.4) 0.9 0.9 0.9 4 These figures are derived from new World Bank estimates for Total .............. 4.4 15.7 18.5 19.7 97 countries and include nearly all developing countries for which _ information exists. They cover both public loans and private loans guaranteed by governments of the debtor countries, all (a) End of year; figures in parentheses are crude estimates. with maturities of one year or more. The figures on debt out- (b) Part of 1965 figures are estimates. standing also include the undisbursed share of loans contracted. which amounted in 1965 to about 25% of the total. SOURCE: World Bank CHART lI EXTERNAL DEBT SERVICE ! seemed virtually impossible for them to maintain OF DEVELOPING COUNTRIES payments unless the debts were refinanced or the schedules of repayments extended. In each case a Billions of U.S. Dollars Percent 5 10% conference of the creditors was organized with the YEARLY particular debtor and the debt service was resched- DEBT SERVICE AS o OF uled or the debt refinanced. The debtors undertook I to limit the assumption of additional obligations for 8% a year or more. .fg ~~~~~~~~~~~~Partly as a result of these debt crises, private export credit has attracted increasing attention. Sometimes it is extended by the exporter in the 6% form known as suppliers' credit, at other times by nt~%" A2 4 a bank (usually in the exporter's country) in the form often called buyers' credit. In some cases it is extended to governments, in others to private 2 l | ll 11 l 1 - 4% borrowers. Often the exporter's government guar- antees the credit or actually advances the funds to 34/ | | ll l ll l l 11|111 the borrower. In any case, it constitutes a large part of the total flow of funds to developing countries; 1 l l ll l ll l | - 2% in the maturities of a year or more it may approxi- mate a gross flow of $4 billion a year. While statistics on the subject are far from complete, it appears that export credit may account very roughly for a 1 quarter of the developing countries' total outstand- ing debt. The share of such credit in annual debt service is of course much higher because of the ing new obligations, especially in the form of sup- prevalence of relatively short maturities; it may pliers' credits. Another influence was action by approach half the total. creditor countries in limiting the volume of lending, Experience has shown the dangers of uncon- particularly of credits on hard terms, to certain trolled use of export credit from private sources. countries in acute debt positions. An improvement In many cases, the maturities are too short and in- in the trade balance has helped several countries terest rates are too high in relation to the debtor limit their recourse to higher indebtedness. A num- country's capacity for servicing its debt. Also, sup- ber (including Brazil, Argentina, Mexico, Chile and pliers' credits are often employed in excessive Korea) raised their export earnings rapidly. Some concentrations at a particular period of time, so (including Brazil, Colombia, Chile and Korea) also that maturities are bunched too closely together. curtailed import demand by slowing down inflation. I Since credits are usually tied to purchases from Typically, the countries whose debt continued the individual exporters, exceedingly high prices have swift expansion of previous years were those whose sometimes been charged. Adequate surveillance imports rose rapidly while exports increased at has often been lacking on both the creditor and the relatively low rates. This occurred in India and a debtor side, so that credits have been used to number of other countries in Asia and Africa, in finance imports of little or no value to development. some cases because of internal conditions not Recognition of these problems was in part respon- sufficiently conducive to export promotion, in others sible for the combined support which representa- because of unfavorable demand conditions for tives of creditor and debtor governments gave to a particular export commodities. resolution in the UNCTAD conference in Geneva in In recent years the debt service of a few develop- 1964, under which the Bank is making its study of ing countries reached such proportions that it the subject of suppliers' credits (p. 20). Moderation of the debt service burden of develop- are of course determined by the terms as well as ing countries would require additional measures by the amount of external capital made available to creditors and debtors alike. The creditor countries them. On the whole, official assistance has tended would have to provide larger amounts of assistance to become less rather than more concessionary, on more concessionary terms, provided that the because of the decline in the share of grants and recipient countries could be expected to show good grant-like contributions (such as long-term credits economic performance. Poor countries face great repayable in local currencies) in the total official difficulties in financing their import requirements bilateral capital flow-from 70% in 1960 to 42% in during a long period of high investment, if at the 1964 and 52% in 1965. This factor has outweighed same time they have to make large payments of the improvement of recent years in the terms of debt amortization and interest in foreign exchange. official bilateral loans, which continued through For some countries, the main reason for debt 1964. Data from the Development Assistance Com- servicing difficulty may be short maturities rather mittee of the OECD indicate that evenfor loans alone than high interest rates. This is true of certain Latin the trend toward more favorable terms was reversed American countries, for instance, which have at- in 1965. The average interest rate for bilateral loan tained higher income levels and have reasonably commitments increased from 3% in 1964 to 3.6% good prospects for a considerable increase in ex- in 1965 and average maturities shortened from ports. For such countries, loans with longer maturi- 28.3 years to 22.1 years. ties and grace periods may contribute to an World Bank data now available from the borrow- improvement in debt servicing capacity. In certain ing countries show the terms of individual debts acute cases of countries facing extreme difficulties contracted by a sample of 34 countries, represent- because of very short maturities and high interest ing 65% of the total outstanding debt of developing on their present debts, rescheduling may be nec- countries at the end of 1964. From 1960 through essary, with a commitment to limit additional bor- 1964 (1965 data are not yet available), average in- rowing on unfavorable terms. terest rates on loans contracted by these 34 coun- None of this, however, should be taken to mean tries declined from 5.66% to 4.23% and maturities that developing countries cannotafford, and hence increased from 13.3 years to 22.8 years (see Table should avoid, any increase in debt servicing obliga- 6). The average terms of all loans reached their tions. While they continue to import capital from mostfavorablelevelfortheperiodin 1962 whenthe abroad, they can expect their debt servicing obliga- United States made large-scale loans on conces- tionstogrow.Whatismostimportantinthisrespect sionary terms. In 1963 and 1964, the U.S. gave is that capital should be treated as a scarce resource loans on generally harder terms and the average to be devoted to the most productive purposes, forming part of a well-balanced program of eco- nomic development. TABLE 6 In general, it can be expected that, as long as WEIGHTED AVERAGE TERMS OF EXTERNAL PUBLIC capital is employed for purposes productive enough DEBT OF 34 DEVELOPING COUNTRIES(a) to give an economic return at least, if not more than, Year Contractual Rate of Grace Terms to Yer Amount Interest Period Ib) Maturnty(b) commensurate with the terms on which it is raised, Contracted ($1,000) (%) (Years) (Years) no insupportable debt servicing burden should - 2,48,99 5.66 31 3. 1960 ....2,482,992 5.66 3.1 13.3 arise from its use. Indeed, the aim of a well-directed 1961 . 2,859,700 5.20 4.2 16.5 investment program is to strengthen the economy 1962 . 3,714,919 3.87 5.4 23.2 in which the capital is employed, which should add 1963 . 3,628,024 4.32 5.1 21.2 more than proportionately to its debt servicing 1964 . 4,025,480 4.23 5.1 22.8 capacity. 1960-64. 16,711,115 4.53 4.7 20.1 (a) For the list of countries see Table 7. TERMS OF EXTERNAL ASSISTANCE (b) From the date of agreement; disbursement dates are not taken into consideration. Debt service payments of the developing countries SOURCE: World Bank interest rate for all development loans increased. Asia were more concessionary than those to Africa Tables 7 and 8 show the terms of loans for areas and Latin America. and individual countries in the years 1960 and Tables 9 and 10 show the terms of loans by type 1964. The tables show considerable differences of credit and by lender. The hardest terms, of between areas; mainly because of the predomi- course, were on loans from private sources, espe- nance of lending to India and Pakistan, loans to cially on suppliers' credits. TABLE 7 TABLE 8 WEIGHTED AVERAGE TERMS OF EXTERNAL WEIGHTED AVERAGE TERMS OF EXTERNAL PUBLIC DEBT INCURRED IN 1960 PUBLIC DEBT INCURRED IN 1964 BY 34 DEVELOPING COUNTRIES BY 34 DEVELOPING COUNTRIES Contractual Rate of Grace Term to Contractual Rate of Grace Term to Amount Interest Period (b) Maturity(b) Amount interest Period Maturity ($1,000) (%) (Years) (Years) ($7,000) I(%) (Years) (Years) Grand Total(a) ...... 2,482,992 5.66 3.1 13.3 Grand Total(a) ...... 4,025,480 4.23 5.1 22.8 Africa .159,154 5.63 1.8 19.0 Africa .354,122 4.92 4.6 25.7 Nigeria .50,400 6.50 1.2 19.0 Zambia 7,350 5.74 2.3 25.0 Kenya .22,308 6.13 2.4 24.0 Rhodesia .3,850 5.50 3.5 25.0 36 Tanzania .4,200 6.00 1.0 25.0 Ethiopia .39,210 5.38 4.1 20.3 Rhodesia .5,600 6.00 2.5 9.5 Nigeria .251,693 5.14 4.2 24.5 Uganda .16,800 5.94 3.0 25.0 Kenya. 25,359 4.22 6.1 33.7 Ethiopia .12,061 5.28 0.6 7.3 Uganda .876 4.10 8.4 31.8 Sudan .47,785 4.39 2.1 11.6 Tanzania .25,784 2.52 8.1 37.8 Asia .837,212 4.89 4.3 17.9 Asia . .. 1,533,255 3.39 7.0 30.0 Malaysia .32,836 6.35 1.2 21.1 Thailand .. 24,500 5.50 6.1 19.2 Israel .81,573 6.09 2.5 13.2 Philippines .. 100,704 5.37 2.8 12.2 Iran .61,339 6.09 4.1 19.5 Iran . . 87,738 5.10 1.5 11.3 Thailand .......... 275 6.00 1.0 5.5 Israel .. 106,374 4.48 3.3 13.8 Philippines . 24,347 5.76 3.4 13.7 India .. 546,532 3.30 7.6 33.3 Pakistan .135,752 5.70 7.5 24.5 Pakistan ...667.407667,407 2.69 8.4 35.5 India . 501,090 ........4.19 4.0 16.7 Latin America ... 1,467,856 5.06 3.3 15.1 LatinAmerica ...... 1,282,110 6.17 2.4 10.7 Argentina ......... 18,153 6.08 2.2 11.5 Peru .............. 143,690 7.20 3.0 13.0 Mexico ............ 567,489 5.96 1.5 8.5 Chile .............. 45,793 6.97 2.2 11.3 Costa Rica ........ 13,922 5.62 2.0 8.6 Mexico ............ 378,386 6.23 2.5 12.3 Venezuela ........ 70,771 5.53 3.1 15.6 Honduras ......... 8,900 6.01 4.0 24.8 Guatemala ........ 4,785 5.43 3.0 16.9 Argentina(c) ...... 240,954 6.00 1.6 9.5 Peru ............. 153,461 5.31 4.1 16.1 Nicaragua ........ 14,300 6.00 5.0 22.3 Dominican Rep ...... 91,984 4.64 1.6 8.8 Ecuador .......... 38 6.00 1.0 2.5 Uruguay .......... 96,372 4.59 1.9 8.6 Colombia ......... 50,742 5.98 3.1 22.8 Nicaragua ........ 13,852 4.47 5.9 23.2 Costa Rica ..... 15,450 5.97 2.1 9.5 Colombia ......... 194,090 4.19 5.6 26.6 Venezuela ........ 337,298 5.90 2.3 5.6 Panama .......... 26,700 4.17 5.3 20.6 El Salvador ....... 3,840 5.75 3.0 25.0 Paraguay ......... 16,630 3.81 10.6 25.4 Paraguay ......... 167 5.61 0.1 3.4 Chile ............. 148,134 3.64 6.1 23.7 Guatemala ........ 24,802 5.15 2.7 10.7 Ecuador .......... 45,950 3.42 7.5 33.8 Panama .......... 17,750 4.44 3.4 16.2 Honduras ......... 5,563 2.06 6.0 21.7 Southern Europe. .. 204,516 5.70 2.7 7.5 Southern Europe ... 670,247 3.97 5.1 21.6 Turkey ............ 88,896 5.85 2.4 7.2 Spain ............. 104,113 5.53 3.1 15.9 Yugoslavia ........ 80,509 5.65 3.3 7.8 Yugoslavia ........ 310,454 4.88 3.3 13.3 Spain ............. 35,111 5.42 2.2 7.8 Turkey ............ 255,680 2.23 8.0 33.9 (a) Dominican Republic and uruguay, which appear in Table 8 (a) Sudan, Malaysia and El Salvador, included in Table 7 for 1960, or 1964, did not contract any loans in 1960. Zambia, included in did not contract any loans in 1964. Table 8, was formed as aState in 1964. SOURCE: World Bank b) Grace period and term to maturity defined here as starting from the date of agreement; disbursement dates are not taken into consideration. (c) Data for Argentina are based on debt incurred in 1960 and outstanding in 1964 and do not reflect debt repaid between those years; thus, the average grace period and term to maturity for 1960 are overstated and the interest rate may be understated. SOURCE: World Bank TABLE 9 TABLE 10 WEIGHTED AVERAGE TERMS OF EXTERNAL WEIGHTED AVERAGE TERMS OF EXTERNAL PUBLIC DEBT OF 34 DEVELOPING COUNTRIES BY PUBLIC DEBT OF 34 DEVELOPING COUNTRIES BY VARIOUS SOURCES IN 1960 VARIOUS SOURCES IN 1964 Contractual Rate of Grace Term to Contractual Rate of Grace rerm to Amount /nterest Period(a)Maturity(a) Amount Interest Period(a)Marurity(-) ($1,000) (%) (Years) (Years) ($1,000) (%) (Years) (Years) Total External Total External Public Debt . 2,482,992 5.66 3.1 13.3 Public Debt ...... 4,025,480 4.23 5.1 22.8 Privately Placed Publicly issued Debts(b) .1,079,622 6.31 2.0 8.5 Bonds ........... 95,743 5.48 3.0 15.0 Loans from Inter- Privately placed national Organi- Debts(b) 1,039,018 6.01 1.2 5.8 zations ........ . 430,034 5.86 5.2 22.5 Loans from Inter- World Bank. ... 418,040 5.87 5.3 22.9 national Organi- Others ....... . 11,994 5.64 3.8 10.0 zations .. . 1,014,786 3.65 6.7 33.7 Total Bilateral World Bank. 512,700 5.50 4.6 24.9 Loans(c) .......... 709,141 5.71 3.4 14.0 IDA. ......... 394,590 0.75 10.3 49.8 From U.S ...... 382,953 5.59 3.4 11.8 Inter-American From Others .. 326,188 5.84 3.3 16.6 Development 37 Of which: Bank ....... 87,189 5.38 4.6 18.8 Germany 113,598 5.99 4.6 13.3 Others . . 20,307 5.78 0.5 6.6 France 1,947 2.50 1.0 4.0 Total Bilateral U.K .166,118 6.21 2.8 20.9 Loans(C) .. 1,861,106 3.50 6.6 26.9 Loans from Sino- From U.S.. 1,225,805 2.69 7.6 30.6 Soviet countries. 264,195 2.60 3.1 15.7 From Others ... 635,301 5.04 4.6 19.7 Of which: Germany 209,308 4.07 4.7 19.4 (a) Grace period and term to maturity defined here as starting France 32,942 3.76 1.1 18.4 from the date of agreement; disbursement dates are not taken into consideration. U.K 197,447 6.29 6.3 24.6 (b) Includes suppliers' credits, settlement for nationalized prop- Loans from Sino- erties and credits from various sources. (c) Excluding Sino-Soviet Countries. Soviet countries. 14,825 3.09 1.5 5.0 SOURCE: World Bank (a) Grace period and term to maturity defined here as starting rom the date of agreement; disbursement dates are not taken into consideration. (b) Includes suppliers' credits, settlement for nationalized prop- erties and credits from various sources. (c) Excluding Sino-Soviet Countries. SOURCE: World Bank Ill. EXTERNAL FINANCE FOR about $6.6 billion during the five years 1961 to DEVELOPING COUNTRIES 19655, with small variations from year to year. IDA Part I member countries, which provide the OFFICIAL DEVELOPMENT ASSISTANCE bulk of all development aid, disbursed around $6.3 The net flow of official assistance from the indus- billion in 1965, about $200 million more than the trial countries (including the Soviet countries and average for the four previous years (see Table 11). mainland China) to the developing countries and to There was little change in the official flow from the multilateral institutions remained rather static at United States, which has averaged $3.6 billion since 5 The figures for net official and private capital flows from the countries. Another source of difference is in the part of DAC aid industrial to the developing countries, as reported by DAC on the figures which represents expenditures in currencies of aid-pro- basis of submissions by donor countries, are considerably higher viding countries for aid administration and for trainees from de- than estimates based on balance of payments data of the re- velopinge countries, which are not includea in the balance of pay- cipient countries as reported to the International Monetary Fund. ments. In addition, it reflects "errors and omissions,' which may Part of the difference is due to more limited country coverage of include some element of private capital flows from the develop- the IMF balance of payments data, which exclude many of the ing to the industrial countries. Work on the differences by the Franc Zone countries of Africa ana several other developing staffs of the IMF and the World Bank is continuing. TABLE 11 THE FLOW OF FINANCIAL RESOURCES FROM IDA PART I MEMBERS TO DEVELOPING COUNTRIES AND MULTILATERAL INSTITUTIONS(a) (MILLIONS OF U.S. DOLLARS) Official Private 1961 1962 1963 1964 1965 1961 1962 1963 1964 1965 Australia(b) ............. 73 85 97 107 120 - - - 20 23 Austria ................ 2 14 2 15 34 18 17 4 7 14 Belgium ................ 92 80 92 84 121 82 48 95 93 120 Canada ................ 62 54 98 128 120 39 55 33 29 33 Denmark ............... 8 7 10 11 13 25 7 1 21 (3) Finland ................ (2) (2) 2 2 (2) - - - - - France ................ 943 977 851 831 757 489 431 414 550 562 Germany ............... 615 450 424 423 427 219 182 165 268 278 Italy ................ 85 110 110 54 66 177 302 233 188 184 Japan ................ 109 88 140 116 244 279 207 138 188 242 Kuwait ................ 66 3 129 119 62 - - - - - Netherlands ............ 69 91 38 48 60 144 52 109 80 164 Norway ................ 9 7 21 17 12 1 4 8 10 26 38 Sweden ................ 8 19 23 33 39 44 19 31 34 31 United Kingdom ........ 457 421 415 493 480 444 306 280 415 443 United States .......... 3,530 3,671 3,755 3,463 3,766 1,099 819 880 1,297 (1,748) Total .................. 6,130 6,079 6,207 5,944 6,323 3,060 2,449 2,391 3,200 3,871 Data for South Africa are not available, while aid from Luxembourg has been very small. Figures in parentheses are crude estimates. Those not shown are unavailable. (a) Official loans and guaranteed export credits reflected in this table are for maturities of one year or more, in accordance with the UNCTAD definition of capital flows. Thus, they differ from those previously reported by DAC, which did not include loans and export credits with maturities of from one to five years. (b) Figures for Australia are on a fiscal year basis, thus 1961 refers to 1961-1962 etc. SOURCE: DAC for all countries except Finland and Kuwait, for which communications from their governments. 1961. A reduction in French aid to Algeria and DAC members has increased during the last four other North African countries more than offset an years by 32% (in current prices), to more than increase in assistanceto non-members of the Franc $1,250 billion in 1965, the share of official aid in Zone. Official aid provided by the United Kingdom their total GNP declined from about 0.65% in 1961 increased in 1964, but levelled off in 1965. Aid from to about 0.5% in 1965. The ratio of official aid to Germany remained on aboutthe same level. Among their combined national income was about 0.8% in the smaller providers of aid in terms of absolute 1961 and 0.6% in 1965. amounts, Austria, Belgium, Canada, Denmark, The above figures for official aid are based on Japan, the Netherlandsand Sweden have increased DAC calculations and include grants and loans for their assistance in recent years and have given one year and more.6 It should be noted that grants loans on more concessionary terms. Australia, are made in a variety of forms, from free converti- which recently joined the Development Assistance ble currencies to food aid, while loans are extended Committee of the OECD, also raised the level of its aid, especially to countries in southeast Asia and the Pacific. 6 In 1965, the DAC revised its figures for tlows of financial re- sources to include loans of from one to five years, which had Since the combined gross national product of the been esxcluded in previous years. at many different interest rates and with a wide IDA for the fifth consecutive year. range of maturities. These differences in terms are not reflected in the statistics for total aid. PRIVATE CAPITAL FLOWS The volume of gross disbursements on loans by The volume of private long-term capital flows, net multilateral institutions to developing countries has of amortization, to the developing countries as a increased steadily in recent years, following the group increased by considerable amounts in both rising trend of their commitments. In 1965, how- 1964 and 1965; defined as investments (including ever, they increased at a faster rate, from $953 re-invested earnings), loans and guaranteed ex- million in 1964 to $1,367 million. Net of amortiza- port credits for one year or more, it has been esti- tion, multilateral disbursements increased from mated at almost $3.8 billion in 1965, compared $790 million in 1964 to $980 million in 1965. with $3.2 billion in 1964 and $2.4 billion in 1963 The Soviet countries and mainland China are (Table 11).The increase in 1965 mainly reflects an reported to have disbursed in 1965 approximately expansion of direct U.S. investments in certain $500 million of aid to the developing countries, petroleum exporting countries in the Middle East about the same as in 1964. and Africa (especially in Libya and Nigeria). There seems little prospect that the flow of bilat- Nearly half the private capital flows to developing eral aid will be greatly increased in the near future. countries in the last two years came from the U.S. 39 / While United States legislative action had not been Most U.S. private investment in developing coun- completed by the date of this Report, indications tries has been in Latin America, notably in Mexico, were that the appropriation under the Foreign As- Venezuela and Peru, although a considerable part sistance Act for fiscal year 1967 would not be sig- has been directed to petroleum exporting countries nificantly larger than in recent years. Greater em- in the Middle East and Africa. Other developing phasis will be placed on agricultural development, countries, especially those in Asia and Africa, at- education and health. Assistance through food tracted only small amounts of U.S. private capital. sales under Public Law 480 will be more closely The second largest source of private investments, linked to efforts by recipient countries to raise their as well as of official assistance, has been France, own output of food. Loans will be given for fertilizer which provided about $550 million in both 1964 plants and infrastructure projects to raise domestic and 1965. Private investments from the United food production. Kingdom and the Netherlands also increased in Some of the other donors have raised their aid 1965, while theflowfrom Germany remained about budgets. The Government of the United Kingdom the same. There was a considerable increase in announced a somewhat higher target figure for offi- private Japanese capital flows, chiefly in the form of cial aid in the financial year 1966/67. Japan an- long-term export credits to India and Pakistan. nounced its intention to increase its aid to the The total flow of private capital to the developing equivalent of 1% of national income as soon as pos- countries includes direct investments, suppliers' sible. Increases in budgetary aid appropriations credits and investments in bonds of the developing have also been made byAustralia,Canada,Germany countries and of multilateral lending agencies. A and the Netherlands. Canada also has announced major advantage to the developing countries, in that, with some exceptions, its long-term develop- addition to new plant and equipment, is the trans- ment lending in the future will be completely free fer of skills and know-how that accompanies most of interest, with 50-year maturities and 10-year private direct investment and portfolio investment grace periods. In a few cases, depending on the through such institutions as the World Bank. Such balance of payments situation and economic pros- investments help directly to expand production, pects of the recipient, loans will be for 30 years at employment and, in many cases, exports. The vol- 3%, with a 7-year period of grace. Sweden has not ume of new direct private investments increased only continued to expand its bilateral assistance in 1965 to about $1.35 billion, plus about $840 program, but also included in its budgetary mea- million in reinvested earnings. In addition, portfolio sures for 1966/67 a supplementary contribution to investments in developing countries and multilat- eral institutions exceeded $1 billion. Private capital resulted in a reduction in direct investments from flows in 1965 also included some $740 million in the United Kingdom to non-sterling area developing exportcredits, including manywith short maturities countries, though the total of United Kingdom and high interest rates. Payments of income on direct investments in the developing countries as private investments in the developing countries, a whole increased in 1965. some of which is reinvested, have increased con- tinuously and in 1965 may have amounted to $4 INTERNATIONAL CAPITAL MARKETS billion. In 1965 the developing countries sold bonds in Private investments in most developing countries external capital markets valued at about $230 mil- were excluded from the U.S. program to reduce the lion, $10 million less than in 1964. In the first half outflow of private capital, which was initiated in of 1966 the value of new issues they placed abroad early 1965 as one of the measures to improve the was some $80 million. The World Bank and the U.S. balance of payments. The voluntary restraint Inter-American Development Bank sold bonds and was strengthened in early 1966 when a quantitative notes of about $535 million in 1965 and $414 target, which allowed for a certain increase, was set million in the first half of 1966. Interest rates on for foreign investments to be made this year by new issues, both by multilateral institutions, agen- major corporations. The target was not applied to cies and the developing countries, have continued developing countries, with the exception of some to rise sharply, particularly since the latter part of which are major petroleum exporters. U.S. banks 1965. and non-banking financial institutions were asked General developments in international capital in February 1965 to limit their foreign lending so markets have been greatly influenced by various that the outstanding amount of private foreign measures to reduce the U.S. balance of payments claims would not increase during the year by more deficit. For two decades, the U.S. capital market than 5%. Within this ceiling, first priority was given has been the major outlet for international issues, to credits directly financing U.S. exports, second to including those of European borrowers. New York's credits to developing countries. In practice, there attractions as a bond market have included a very was a reduction in 1965 of about $650 million in large supply of funds and interest rates considera- the flow of short-term U.S. private credits to devel- bly lower than elsewhere. Since the imposition in oping countries, while the volume of long-term pri- July 1964 of the Interest Equalization Tax on pur- vate credits they received remained on about the chases by U.S. residents of certain foreign securi- same level as in 1964. The ceiling on foreign claims ties, however, sales of securities not exempt from by banks and some foreign credits by non-banking the tax have been greatly reduced. Issues by most financial institutions for 1966 is now set at 109% developing countries, as well as by multilateral in- of the amount outstanding at the end of 1964, with stitutions of which the U.S. is a member (including the same order of priority for export financing and the World Bank), were exempted. credits to developing countries. In contrast to the An important result of the voluntary restraint on increase of $575 million to the end of 1966 per- foreign lending was that U.S. corporations, which mitted by this ceiling, the volume of foreign credits previously relied chiefly on the U.S. market for by U.S. banks was reduced by about $140 million funds to finance their investments abroad, turned from the end of 1964 to March 1966. to large-scale borrowing in the markets of continen- The United Kingdom also has applied restraints tal Europe, at higher interest rates and, in most on private capital investments in other countries. cases, by selling convertible bonds. This resulted In accordance with a policy statement in April 1965, in a large increase in the value of foreign issues in exchange allocationsfordirect investments in coun- European capital markets during the second half tries outside the sterling area have been limited to of 1965 and the first half of 1966. those cases in which a considerable foreign ex- The total value of foreign issues in New York change inflow of investment income or export earn- amounted to about $1,325 million in 1965 and ings to the United Kingdom could be expected. This about $500 million in the first quarter of 1966, compared with $1,155 million in 1964 and about TABLE 12 $1,445 million in 1963. The largest borrowers in ISSUES PLACED INTERNATIONALLY BY 1965 and 1966 were public and private bodies in DEVELOPING COUNTRIES AND Canada and Japan, under certain exemptions from MULTILATERAL DEVELOPMENT INSTITUTIONS the Interest Equalization Tax. Finland borrowed a (MILLIONS OF U.S. DOLLARS) relatively small amount in the U.S. market in 1965. 1964 1965 lstha/f1966 A number of other foreign issues were placed in Developing Countries 1965 by borrowers of countries not exempt from Placed in New York Colombia ......... 2.5 the tax, such as Australia, New Zealand, Sweden, Israel .94.0 96.3 15.0 Portugal and the European Investment Bank. Al- Jamaica 7.5 Liberia ..........6.0 though these issues were underwritten mainly in Malaysia . 25.0 New York, they were sold primarily outside the U.S. Mexico 79.9 43.4 25.0 The value of issues placed in the United States Peruh 8.0. . 15.0 by developing countries was $221 million in 1965 Portugal 20.0 Spain........... 5.0 and about $55 million in the first half of 1966, com- Trinidad .7.5 pared with $203 million in 1964 and only $121 Venezuela 6.3 15.5 3.0 million in 1963. The following developing countries Total .203.2 221.2 54.5 borrowed in 1965 and the first half of 1966: Mexico, Jamaica.8.8 8.8 Venezuela, Peru, Jamaica, Liberia, Portugal, Israel, Placed in Other Markets Malaysia and the Philippines. The World Bank made Mexico 20.0 one issue of $200 million in the United States in Peru 6.0 $175 million in June Portugal .........20.0 January 1965 and another of $175 million in June Spaing 4.6 1966; proceeds from sales of these bonds to U.S. Venezuela ............0.7 investors are to be so invested in the United States Total 29.6 26.7 as to eliminate any effect on the U.S. balance of I Multilateral Development payments until after 1967. Placed in New York The value of international issues made in London World Bank ............. 200.0 175.0 declined in 1965 to a little more than half that in IeveropmentBank ...... 150.0 1964. Because most of such issues in both years Total ................ 150.0 200.0 175.0 were sold to residents in countries other than the Placed in Other Markets (a) United Kingdom, the reduction indicates in some World Bank 99.5 18.5 Inter-American degree a shift in underwriting of international issues Development Bank ...... 15.0 24.2 from London to New York. Most external borrowing Total ................ 15.0 99.5 42.7 in London in 1965 was by the Scandinavian coun- Total Issues by Developing tries. Relatively small issues were made in 1965 Countries ................... 241.6 230.0 81.2 and the first half of 1966 by traditional borrowers Total Issues by Multilateral such as Australia, Ireland and New Zealand. In both Development Institutions... 165.0 299.5 217.7 sh aGrand Total... ..... . .406.6 529.5 298.9 1964 and 1965 Jamaica was the only developing 1 country which could make use of its access to the (a) Excluding Bonds of the World Bank and the Inter-American Development Bank for short and medium-term placed with gov- London market, where it borrowed the equivalent ernmental institutions in various countries. of $8.8 million each year. SOURCE: World Bank While borrowing by U.S. corporations in the capi- the European markets in recent years, with the tal markets of continental Europe increased greatly, exception of Mexico which, in early 1966, placed an the value of issues by public and private bodies of issue in Luxembourgof 20 million Units of Account7. the Scandinavian countries and Japan, which in The World Bank borrowed in the first half of 1965 1964 played a major role in European markets, was the equivalent of $62.5 million in Germany and $14 sharply reduced in 1965 and the first half of 1966. inun 5 t r1 7 Units of Account are equivalent to the gold value of the U.S. No developing country has been able to borrow In dollar. million in Switzerland. Bonds and notes of the World of capital from the United States and a large Bank in an amount of $132 million also were sold demand for funds by U.S. corporations to finance in early 1966 to central banks and official institu- overseas operations, have added to the upward tions in a large number of countries other than the pressure on interest rates in some European capital U.S. The Inter-American Development Bank (IDB) markets. In the United States market, long-term sold $65 million in bonds to central banks and rates were stable until the middle of 1965, when other governmental institutions. In early 1966 the they began to rise gradually as demand for funds IDB borrowed the equivalent of $24.2 million in the increased, mostly for investments by private corpo- Italian market. rations. In the latter part of 1965 and the first half The World Bank also made two issues in Canada, of 1966, the upward trend was strengthened by in amounts equivalent to U.S. $23 million and U.S. tightening of the credit supply and an increase in $18.5 million respectively, in early 1965 and 1966. the discount rate applied by United States mone- No other issues by external borrowers have been tary authorities. made in recent years in Canada, which is itself In Germany the yield on bonds of public authori- greatly dependent on borrowing in the U.S. market. ties rose as high as 8.65% in June 1966. The rate Interest rates have shown a strong upward trend on European Dollar Bonds in London climbed to in 1965 and the first half of 1966 in most capital 6.9% in June 1966. Yields on U.S. Government markets (see Chart Ill). In most European markets, medium-term bonds increased to an unusually high the rise in interest rates has continued since 1964, level of 4.7% in the first half of 1966. Among the initiated by an increase in demand for funds by major international capital markets, only in Switzer- domestic borrowers, mainly local authorities and land did interest rates remain fairly stable in 1965/ semi-public institutions. The reduction in the supply 66, at a level somewhat less than 4%; this was the CHART Ill YIELDS ON LONG-TERM GOVERNMENT BONDS IN SELECTED CAPITAL MARKETS (PERCENT) 9% - . I I I I I  I I ,, ,, I . I I I I . I I I I . I I . ,,,,, I , . I . . 8R - MONTHLY FRANKFURT N (EUROPEAN DOLLAR)-ernen 7% LONDON _ _ . / s - := ~~~~~~LONDON 6y,~ - AMSTERDAM 5% - _ / ^ >g c 0 ~~~~~~~~~~~~~~~~~~~~~~~~PARI S . NEW YORK-U.s. Treasury 31/4%, 3NYO 45 --_= % Z - ................'......... ZURICH 3%- . .......... AMSTERDAM-Netherlands Government Perpetual 3% 2%~ ~ ~ ~ ~~~~~~~FA -KLONDO-UA vergenolf bnonCds of pu2blic authorities LONDON (EUROPEAN DOLLAR)-Bonds of, or guaranteed by a government, public authority or international organization 1% NEW YORK-U.S. Treasury 31/4%, 1983/78 PARIS-French Government Rente Perpetuelle 5%, 1949 ZU RICH-Swiss Government 3%, 1949-1974 _ I I I I l I I I I I I I I I I I I l II I l I I I I I I I l I I I I J F M A M J J A S 0 N D J F M A M J J A S O'N DIJ F M A M J J A S 0N DIJ FM AM J J A S 0 N D 1963 1964 1965 1966 result of strict government control over new issues, I the Government has recently offered scholarships both domestic and foreign, and a flexible monetary to about 1,000 foreign students per year. It has also policy. approved medium-term credits to finance pur- Developing countries which borrowed in external chases in Yugoslavia by various developing coun- capital markets in 1965 paid relatively high interest tries in Asia and Africa, chiefly the U.A.R., India, rates, in certain cases with a yield close to 7% in Indonesia and Sudan. By the end of 1965, the cum- European markets and around 6.5% in the U.S. The ulative amount of such commitments exceeded the Canadian dollar bonds issued by the World Bank in equivalent of $300 million, of which only a part has February 1966 yielded 5.98%, the highest rate ever been disbursed. Additional suppliers' credits have carried by a new issue of World Bank bonds. The been provided by Yugoslav exporters with the as- $175 million issue placed in New York in June 1966 sistance of the Yugoslav Bank for Foreign Trade. carried a yield of 5.39%. X Israel's technical assistance is mainly directed to Africa, where more than 500 Israeli experts worked ASSISTAN\lCE FROM i in 1965, as well as to Asia and Latin America. Israel NON-INDUSTRIAL COUNTRIES also received more than 2,000 trainees and stu- The division of countries between aid providers and dents during that year, including more than 1,000 aid recipients has not been fixed or rigid and, for- from Africa and about 400 from Latin America. In a tunately, an increasing number of countries are in few cases, it also gave medium and long-term both categories as they proceed from the stage of credits to finance purchases in Israel by developing being entirely aid recipients to the ultimate stage countries. of being only aid providers. In addition to the con- Spain, Mexico and Venezuela have become active vertible portion of their subscriptions as members in assisting the Latin American republics, both of international agencies such as the World Bank E bilaterally and through the Inter-American Develop- and its affiliates, an increasing number of countries ment Bank. Spain, for instance, has announced its which have been and still are recipients of foreign intention of providing up to $1 billion equivalent to assistance have themselves extended aid to other members of the Organization of American States to developing countries. help finance economic development over the next The scope of such aid has been gradually expand- 10 years, though the form and terms of such as- ing, although so far it has been chiefly in the form sistance are not yet clear. Mexico has sent some of technical assistance and, in some cases, in fi- 350 experts to assist other Latin American coun- nancing exports to the recipient countries. It has tries, provided training facilities for their techni- been directed mainly to those countries with which cians, and made a loan to the Central American the aid donors have special ties or physical prox- Bank for Integration. Venezuela extended short- imity. Among IDA's Part II members, Ireland, Israel, term credits to the Central Bank of Colombia. Jordan, Mexico, Panama and Yugoslavia have re- Kuwait, a Part I member of IDA, has started pro- leased all or part of the national currency portions of viding financial assistance from its reserve funds as their subscriptions in usable form, in addition to well as through a special Kuwait Fund for Arab their initial payments of 10% in U.S. dollars. A num- Economic Development. Amounts extended during ber of developing countries have participated in 1961/62 to 1964/65 totaled $356 million. These technical assistance activities of the international loans usually carry an interest rate of 3% to 4% agencies. The non-industrial countries which have with a maturity of 10 years or more and have been achieved a measurable level of aid are Brazil, the made almost exclusively to Arab countries. Republic of China, India, Israel, Kuwait, Mexico, The Republic of China has a technical assistance Spain, U.A.R., Venezuela and Yugoslavia. program under which it provides specialist teams to Yugoslavia's aid has been chiefly in technical as- work overseas and trains foreign technicians. The sistance and medium-term credits for the purchase specialist teams consist mostly of agricultural ex- of Yugoslav goods. Yugoslavia now has more than perts working on farming demonstration missions 800 experts working in Asia and Africa. Moreover, in Africa. Doctors, nurses and engineers have been lent to Libya. By the end of 1965, the Republic of sources and external capital. The record is not uni- China had also provided training facilities to some formly good and there will undoubtedly continue to 3,300 foreign technicians, in collaboration with the be disappointments. Yet many countries have gained U.S. AID. Most of the trainees came from neighbor- valuable experience in the preparation and execu- ing Asian countries, especially Thailand, Viet-Nam, tion of development projects and programs. It ap- the Philippines and Korea, as well as from 28 pears that more developing countries have become African countries. Major subjects were agriculture, aware of the need for effective measures to raise education and industrial development. domestic food production and, where necessary, to Most of India's contribution to technical assist- help check the increase in population. A number of ance has been in the framework of the Colombo them, including some of the large ones, have been Plan and the Commonwealth African Assistance persuaded by serious difficulties that unsound eco- Plan. By the end of 1965, more than 3,000 trainees nomic policies and sustained growth are incompat- had been trained in India. The services of some ible, and some have been taking steps to adjust Indian experts have been lent to the Colombo Plan their policies accordingly, with promising results. and the African Commonwealth countries. India has Increased attention to the developing countries' given $76 million of assistance to Nepal for the economic performance is expected to result in fur- construction of irrigation and power projects, air- ther improvements in both the allocation and use of ports and highways, and for sericulture, forestry external assistance. Toward this end, the World and education. Credits amounting to $62 million to Bank's work in evaluating performance of member finance purchases in India have been given mainly countries has been strengthened; this assists in to Burma, Ceylon, Nepal, Sudan and Tanzania. determining the eligibility of borrowers for Bank The United Arab Republic has lent the equivalent and IDA financing and helps provide a basis for of about $79 million to Algeria, Guinea, Mali, So- judgments by members of consultative groups or- malia and Yemen to finance imports of consumer ganized by the Bank. and capital goods from the U.A.R. Loans to Algeria While the developing countries' policies and per- and Yemen have been interest-free, while those to formance are a major determinant of their pros- Guinea, Mali and Somalia have been at 2.5%, with pects for economic growth, the availability of ade- various maturities. The U.A.R. has also sent experts quate foreign exchange is crucial. Most important and teachers to Middle Eastern and African coun- is the volume of export earnings, which depends tries, and has provided scholarships to foreign to a considerable extent upon the level of produc- students. tion in the industrial countries, on which the devel- The developing countries are also beginning to oping countries must rely for 80% of their export provide cooperation in regional projects. For in- sales as well as virtually all of their net inflows of stance, the Mekong River projects are being as- capital. For the near future, strong expansion sisted by Indian technical aid and cement offered seems in prospect for the industrial countries as a byThailand,aswellasaidfrom non-regional sources. group. The gross domestic product of all OECD The total volume of aid provided by the non-in- members combined is expected to grow in 1966 at dustrial countries is still very small in relation to as- a rate of 5% to 5.5% in real terms, or somewhat sistance from the industrial countries. An expan- faster than the 5% growth of 1965. The U.S. is sion of such forms of aid may be expected. It will be expected to raise its gross domestic product in real of considerable benefit, especially in the transfer terms at a rate of 5.5% to 6%, even faster than of skills and know-how. last year. Some industrial countries which had a low rate of expansion in 1965 (France, Italy and Japan) seem to have resumed more rapid growth. Thus IV. OUTLOOK OECD members other than the U.S. are expected to One of the more hopeful signs in recent years has raise their gross domestic product by 4.5% in 1966, been the growing ability of many developing coun- compared to 4% in 1965. tries to make more efficient use of their own re- ! The continued swift growth of the industrial coun- tries, as well as some replenishment of their stocks stitutions are faced with difficulties due to high in- of primary materials, which will depend in part on terest rates and other factors, such as the size and the state of international tension, may well in- organization of these markets. It is to be hoped crease their demand for imports from the develop- that conditions can be established in world capital ing countries at a higher rate than last year. markets which will permit a freer movement of capi- At this time it is impossible to predict to what ex- E tal internationally. tent the recommendations of the United Nations, The higher cost of private funds may well con- UNCTAD and DAC for an increase in the level of de- tinue to be reflected in interest rates on conven- velopment assistance will actually be implemented tional loans to the developing countries, whether in the near future. Budgetary steps taken thus far they borrow directly or through international in- indicate that a growing number of industrial coun- stitutions which obtain all or part of their resources tries appreciate the need to increase their assist- in private markets; in 1966, the World Bank had to ance programs, but much more external finance is raise its standard rate on loans to the developing required to cope with existing problems and take countries from 5.5% to 6%. advantage of opportunities for more productive de- At least in the immediate future, inadequacy of velopment investments. While the increasingly external resources is likely to be a major constraint heavy debt burden of developing countries points on the more rapid growth of developing countries LS / to the need for funds on easier terms, recent legis- and on their ability to improve performance. A lativeauthorizationssuggestthattheaverageterms shortage of such resources is reflected most di- of total bilateral assistance may become less, rectly by insufficient growth in imports. Barring an rather than more, concessionary. unforeseen change in world markets, imports of The net flow of financial assistance from multi- developing countries cannot be expected to grow lateral institutions (including the World Bank Group, sufficiently unless the flow of external funds is in- the Inter-American Development Bank and the creased considerably. European Development Fund) can be expected to A higher level of aid on inappropriate terms, how- increase as the rising level of their commitments in ever, could make the external debt problem even recent years is reflected in actual disbursements. more difficult. If aid is not made available on aver- The future levels of their commitments will be in- age terms which are more concessionary, the gross fluenced by government decisions on such ques- volume of assistance will have to be steeply and tions as the size of contributions to replenish IDA continuously increased in order to maintain any funds and on their access to capital markets. A given level of real resources transfer to the develop- further increase in reliance upon multilateral insti- ing countries. tutions as channels for development assistance Uncertainty concerning the volume of foreign ex- may be expected as the African and Asian Develop- change that will be available, both in export earn- ment Banks begin active operations. ings and in foreign assistance, is also a serious Theprospectsfordirectborrowingbythedevelop- impediment to the formulation of long-term de- ing countries in external capital markets seem to be I velopment policies and good performance. A major very limited for the near future, even for countries anomaly in the present system of aid lies in the in- that are acceptable borrowers in such markets, consistency between the justifiable insistence by partly because of the increased demand for funds those who provide assistance that recipient coun- by borrowers in the industrial countries. The pres- tries formulate longer-term development strategy sure on these markets is likely to persist as long as and policies, while they themselves can make no public sector expenditures in the industrial coun- commitment of aid beyond a period of one year. tries remain very high while private investment The possibilities for better planning and perform- and consumption demand are strong, and while ance by developing countries would be greatly en- capital flows between industrial countries are sub- hanced if the providers of aid could give a reason- ject to voluntary restraint. I n European capital mar- able indication of the level of assistance that might kets, developing countries and international in- be expected during the period of the plan. The prospects for more rapid growth in the developing effort of all countries concerned. The developing countries would also be improved if the disruptive countries themselves must give this effort the high- effects of unpredictable shortfalls in export earn- est priority, avoiding all policies and actions which ings could be mitigated. retard their economic progress. Success depends For most of the developing countries, there also, however, on the willingness of the industrial need be no insurmountable barrier to the achieve- countries to give assistance for economic develop- ment of sound, self-sustaining economic growth, ment a high priority, even when they are confronted but success requires the concerted and determined by balance of payments and budgetary problems. 4E ||W:O:R:LD BA N K5 A4oendlces 47 Bank APpendices page 49 A Balance Sheet .......................................................t 50 B Comparative Statement of Income and Expenses .................................... 52 C Statement of Subscriptions to Capital Stock and Voting Power ....................... 53 D Summary Statement of Loans ....................................................... 55 E Funded Debt of the Bank ....................................................... 57 F Notes to Financial Statements ....................................................... 59 OPINION OF INDEPENDENT AUDITOR ...................................................... 61 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix A Balance Sheol JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F ASSETS Due from Banks and Other Depositories Member currencies, including $5,255,985 United States dollars Unrestricted ................................ .................. $ 8,685,198 Subject to restrictions-NOTE B .142,042,908 $150,728,106 Non-member currency (Swiss francs) .873,218 $ 151,601,324 Investments Government obligations (At cost or amortized cost) 5(/ Face amount $591,003,927 including $325,369,000 obligations of United States Government and its Instrumentalities.. $584,735,498 Time deposits, including $500,000,000 United States dollars 530,687,969 Accrued interest .22,804,708 1,138,228,175 Receivable on Account of Subscribed Capital (See Appendix C) Member currencies, other than United States dollars-NOTE B Non-negotiable, non-interest-bearing, demand notes $344,500,282 Amounts required to maintain value of currency holdings 18,810,009 363,310,291 Effective Loans Held by Bank (See Appendix D)-NOTE C (Including undisbursed balance of $2,085,273,212) 6,299,082,982 Accrued Charges on Loans-NOTE C 63,525,897 Receivable from Purchasers on Account of Effective Loans Agreed to be Sold (Including undisbursed balance of $8,428,102) 20,673,685 Unamortized Bond Issuance Costs 15,610,060 Land and Buildings .$ 24,964,426 Less-Reserve for depreciation .2,209,272 22,755,154 Other Assets ..7,227,847 Special Reserve Fund Assets-NOTE D Due from Banks-member currency-United States $ 12,503 Investment securities-Obligations of United States Government and its Instrumentalities ($289,681,000 face amount; at cost or amortized cost) .................................... 289,457,862 Accrued loan commissions-NOTE C .267,425 289,737,790 Staff Retirement Plan Assets (Segregated and held in trust) 26,269,773 Total Assets .$8,398,022,978 (Continued) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix A Balance sheet (Continued) __________ JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F LIABILITIES, RESERVES AND CAPITAL Liabilities Accrued interest on borrowings ........................................................... $ 39,922,327 Accounts payable and other liabilities ............... 6,381,253 Due to International Development Association ........ .................................... 78,900,000 Undisbursed balance of effective loans (See Appendix D) Held by Bank ........................................................................... $ 2,085,273,212 Agreed to be sold ....................................................................... 8,428,102 2,093,701,314 5a Funded debt (See Appendix E) (Of this amount $183,881,508 is due within one year) .2,805,878,710 Obligation for repurchase of shares of Indonesia-NOTE E 3,164,420 Reserves for Losses Special reserve-NOTE D ...... . .......................................................... $ 289,737,790 Supplemental reserve against losses on loans and guarantees-NOTE F .................. 663,841,310 953,579,100 Staff Retirement Plan Reserve ..26,269,773 Capital Capital stock (See Appendix C)-NOTE G Authorized 240,000 shares of $100,000 par value each Subscribed 224,264 shares .................................................. $22,426,400,000 Less-Uncalled portion of subscriptions-NOTE H ................................... 20,183,760,000 2,242,640,000 Payment on account of pending subscriptions ..4,804,000 Net income-NOTE F From July 1, 1965 to June 30, 1966 .................................................... $ 143,733,200 Less-Indonesia's share of net income-NOTE E .......... I.................. I ........ 951,119 142,782,081 Contingent Liability-LOANS SOLD UNDER GUARANTEE-NOTE I ........... $3,122,000 Total Liabilities, Reserves and Capital ............................................ $8,398,022,978 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix B ComPDra!ive statement of income and ExPenses FOR THE FISCALYEARS ENDED JUNE 30,1965 AND JUNE 30,1966 Expressed in United States Currency-See Notes to Financial Statements. Appendix F July 1 to June 30 1964-1965 1965-1966 Income Income from investments ....................$ 61,394,497 ............................................... $ 63,098,843 Income from loans: Interest .................................................................................198282,681 219,051,360 Commitment charges .......................................................................... 5,761,229 6,962,355 52 Commissions .................................................................................852,062 766,274 Service charges. . 87,511 79,597 Other income .1,242,453 2,431,658 Gross Income .$267,620,433 $292,390,087 Deduct-Amount equivalent to commissions appropriated to Special Reserve-NOTE D .852,062 766,274 Gross Income Less Reserve Deduction .$266,768,371 $291,623,813 Expenses Administrative expenses: Personal services .$ 9,460,526 $ 11,575,433 Contributions to staff benefits ..1,455,842 1,871,545 Fees and compensation ..1,156,906 1,350,218 Representation ..162,486 207,102 Travel ..2,906,195 2,988,728 Supplies and material ..146,296 200,034 Office occupancy ..1,010,163 1,432,886 Communication services ..585,122 729,485 Furniture and equipment ..388,324 459,494 Books and library services ..186,027 214,847 Printing ..260,579 381,431 Insurance ..65,205 99,715 Other expenses ..22,914 28,262 Total Administrative Expenses .$ 17,806,585 $ 21,539,180 Services to member countries .4,516,721 8,268,496 Interest on borrowings ................ : 105,456,176 115,976,299 Bond issuance and other financial expenses .1,914,106 2,011,263 Discount on sale of loans .160,532 95,375 Gross Expenses .$129,854,120 $147,890,613 Net Income .$136,914,251 $143,733,200 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix C Statement o301 ubCript0on to Capial Stock and Votinu Power_____ JUNE 30, 1966 Expressed in United States Currency (in thousands) -See Notes to Financial Statements, Appendix F 12 Amounts Paid in In currency In non- of member negotiable. Subject other than non-interest- to call Subscriptions United bearing, to meet Votin.g Power In United States demand obligations Percent Amount States dollars notes of Bank Number Percent Member Shares of totai (Note G) dollars (Note B) (Note B) (Note H) of votes of total Afghanistan........... 300 .13 $ 30,000 $ 300 $ 1,200 $ 1,500 $ 27,000 550 .22 Algeria.............. 800 .36 80,000 800 72 7,128 72,000 1,050 .42 Argentina ............3,733 1.66 373,300 3,733 27,000 6,597 335,970 3,983 1.59 Australia............. 5,330 2.38 533,000 5,330 47,970 - 479,700 5,580 2.23 Austria.............. 1,867 .83 186,700 1,867 9,000 7,803 168,030 2,117 .85 Belgium ............ 4,500 2.01 450,000 4,500 40,500 - 405,000 4,750 1.90 Bolivia.............. 210 .09 21,000 210 13 1,877 18,900 460 .19 Brazil ..............3,733 1.66 373,300 3,733 33,597 - 335,970 3,983 1.59 Burma.............. 400 .18 40,000 400 1,207 2,393 36,000 650 .26 Burundi (2)............ 150 .07 15,000 150 9 764 13,500 400 .16 Cameroon............ 200 .09 20,000 200 18 1,782 18,000 450 .18 Canada ............. 7,500 3.34 750,000 7,500 67,500 - 675,000 7,750 3.10 Central African Republic .... 100 .04 10,000 100 19 881 9,000 350 .14 5 ~Ceylon.............. 827 .37 82,700 827 1,135 6,308 74,430 1,077 .43 Chad............... 100 .04 10,000 100 9 891 9,000 350 .14 Chile............... 933 .42 93,300 933 8,397 - 83,970 1,183 .47 China ..............7,500 3.34 750,000 7,500 3,178 64,322 675,000 7,750 3.10 Colombia ............ 933 .42 93,300 6,813 2,517 - 83,970 1,183 .47 Congo (Brazzaville) ....... 100 .04 10,000 100 9 891 9,000 350 .14 Congo, Democratic Republic of 600 ..27 60,000 600 5,400 - 54,000 850 .34 Costa Rica............ 107 .05 10,700 467 603 - 9,630 357 .14 Cyprus.............. 150 .07 15,000 150 14 1,336 13,500 400 .16 Dahomey ............ 100 .04 10,000 100 19 881 9,000 350 .14 Denmark ............ 1,733 .77 173,300 1,733 15,597 - 155,970 1,983 .79 Dominican Republic....... 133 .06 13,300 133 483 714 11,970 383 .15 Ecuador............. 171 .08 17,100 1,581 129 - 15,390 421 .17 El Salvador ........... 107 .05 10,700 287 783 - 9,630 357 .14 Ethiopia ............. 100 .04 10,000 1,000 - - 9,000 350 .14 Finland ............. 1,333 .59 133,300 1,333 11,997 - 119,970 1,583 .63 France..............10,500 4.68 1,050,000 10,500 94,500 - 945,000 10,750 4.30 Gabon ............. 100 .04 10,000 100 17 883 9,000 350 .14 Germany, Federal Republic of. 12,800 5.71 1,280,000 12,800 94,500 20,700 1,152,000 13,050 5.22 Ghana (9)............ 467 .21 46,700 467 2,702 1,501 42,030 717 .29 Greece (I) ............ 500 .22 50,000 500 4,500 - 45,000 750 .30 Guatemala............ 107 .05 10,700 467 603 - 9,630 357 .14 Guinea.............. 200 .09 20,000 200 1,800 - 18,000 450 .18 Haiti............... 150 .07 15,000 150 35 1,315 13,500 400 .16 Honduras ............ 80 .04 8,000 620 - 180 7,200 330 .13 Iceland ............. 150 .07 15,000 798 26 676 13,500 400 .16 I ndia (2) .............8,000 3.57 800,000 8,000 23,624 30,656 720,000 8,250 3.30 Iran ............... 1,286 .57 128,600 1,286 6,732 4,842 115,740 1,536 .62 Iraq (1).............. 550 .25 55,000 550 1,350 3,600 49,500 800 .32 Ireland.............. 853 .38 85,300 853 5,423 2,254 76,770 1,103 .44 Israel .............. 959 .43 95,900 959 2,997 5,634 86,310 1,209 .48 Italy...............6,660 2.97 666,000 6,660 59,940 - 599,400 6,910 2.76 Ivory Coast ........... 200 .09 20,000 200 342 1,458 18,000 450 .18 Jamaica............. 320 .14 32,000 320 24 2,856 28,800 570 .23 Japan ..............7,726 3.45 772,600 7,726 60,036 9,498 695,340 7,976 3.19 Jordan.............. 163 .07 16,300 163 42 1,425 14,670 413 .17 Kenya.............. 333 .15 33,300 333 184 2,813 29,970 583 .23 Korea .............. 250 .11 25,000 250 2,250 - 22,500 500 .20 Kuwait.............. 667 .30 66,700 667 6,003 - 60,030 917 .37 Laos............... 100 .04 10,000 100 900 - 9,000 350 .14 Lebanon ............. 90 .04 9,000 900 - - 8,100 340 .14 Liberia (I) ............ 150 .07 15,000 150 14 1,336 13,500 400 .16 (Continued) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix C Statement of Subscriptions to Capital Stock and voting Power (Continued) JUNE 30, 1966 Expressed in United States Currency (in thousands)-See Notes to Financial Statements, Appendix F In currency In non- of member negotiable, Subject other than non-interest- to call Subscriptions United bearing, to meet Voting Power In United States demand obligations Percent Amount States dollars notes of Bank Number Percent Member Shares of total (Note G) dollars (Note B) (Note B) (Note H) of votes of total Libya .200 .09 $ 20,000 $ 2,000 $ - $ - $ 18,000 450 .18 Luxembourg ........ . 200 .09 20,000 200 1,800 - 18,000 450 .18 Malagasy Republic ............. 200 .09 20,000 200 22 1,778 18,000 450 .18 Malawi ....................... 150 .07.v 15,000 150 14 1,336 13,500 400 .16 Malaysia ....................... 1,333 .59 133,300 1,333 6,000 5,997 119,970 1,583 .63 Mali ...................... .. 173 .08 17,300 173 1,557 - 15,570 423 .17 Mauritania ..................... 100 .04 10,000 100 9 891 9,000 350 .14 Mexico ....................... 2,080 .93 208,000 2,080 18,720 - 187,200 2,330 .93 Morocco (1) .......... . 700 .31 70,000 700 75 6,225 63,000 950 .38 Nepal ....................... 100 .04 10,000 100 9 891 9,000 350 .14 Netherlands ................... 5,500 2.45 550,000 5,500 49,500 - 495,000 5,750 2.30 NewZealand ........... 1,667 .74 166,700 1,667 150 14,853 150,030 1,917 .77 Nicaragua (1) ................... 60 .03 6,000 240 360 - 5,400 310 .13 Niger .. ............. 100 .04 10,000 100 9 891 9,000 350 .14 Nigeria ....................... 667 .30 66,700 667 116 5,887 60,030 917 .37 Norway .......... 1,600 .71 160,000 1,600 14,400 - 144,000 1,850 .74 Pakistan ....................... 2,000 .89 200,000 2,000 2,049 15,951 180,000 2,250 .90 Panama ....................... 90 .04 9,000 126 - 774 8,100 340 .14 Paraguay ...................... 60 .03 6,000 60 540 - 5,400 310 .13 Peru ....................... 350 .16 35,000 3,500 - - 31,500 600 .24 Philippines ..................... 1,000 .45 100,000 3,700 6,300 - 90,000 1,250 .50 Portugal ....................... 800 .36 80,000 800 1,498 5,702 72,000 1,050 .42 Rwanda ....................... 150 .07 15,000 150 1,350 - 13,500 400 .16 Saudi Arabia ......... ... 960 .43 96,000 960 22 8,618 86,400 1,210 .48 Senegal ....................... 333 .15 33,300 333 30 2,967 29,970 583 .23 Sierra Leone ......... .. 150 .07 15,000 150 14 1,336 13,500 400 .16 Somalia ....................... 150 .07 15,000 150 14 1,336 13,500 400 .16 South Africa .......... ......... 2,133 .95 213,300 2,133 18,012 1,185 191,970 2,383 .95 Spain ....................... 2,667 1.19 266,700 2,667 14,580 9,423 240,030 2,917 1.17 Sudan ............ ........... 600 .27 60,000 600 1,800 3,600 54,000 850 .34 Sweden ........... 2,400 1.07 240,000 2,400 21,600 - 216,000 2,650 1.06 Syrian Arab Republic (1) .. . 333 .15 33,300 333 44 2,953 29,970 583 .23 Tanzania ....................... 333 .15 33,300 333 30 2,967 29,970 583 .23 Thailand .................... 1,013 .45 101,300 4,473 143 5,514 91,170 1,263 .51 Togo ............... .... 150 .07 15,000 150 23 1,327 13,500 400 .16 Trinidad and Tobago ........... 267 .12 26,700 267 24 2,379 24,030 517 .21 Tunisia ....................... 300 .13 30,000 300 74 2,626 27,000 550 .22 Turkey ....................... 1,150 .51 115,000 1,150 271 10,079 103,500 1,400 .56 Uganda ....................... 333 .15 33,300 333 30 2,967 29,970 583 .23 United Arab Republic .......... 1,421 .63 142,100 1,421 119 12,670 127,890 1,671 .67 United Kingdom (2) . .......... . 26,000 11.59 2,600,000 26,000 233,993 - 2,340,000 26,250 10.50 United States .................. 63,500 28.31 6,350,000 635,000 - - 5,715,000 63,750 25.50 Upper Volta .................... 100 .04 10,000 100 19 881 9,000 350 .14 Uruguay (2) .............. . 280 .13 28,000 1,225 438 630 25,200 530 .21 Venezuela (') .................. 1,400 .62 140,000 4,613 1,965 7,422 126,000 1,650 .66 Viet-Nam ...................... 300 .13 30,000 300 2,700 - 27,000 550 .22 Yugoslavia ..................... 1,067 .48 106,700 4,973 5,697 - 96,030 1,317 .53 Zambia ....................... 533 .24 53,300 533 48 4,749 47,970 783 .31 Totals .................. 224,264 100.00 $22,426,400 $826,242 $1,053,087 $344,500 $20,183,760 250,014 100.00 (1) Additional subscriptions from these members aggregating $140,100,000 are in process of completion. (2) Amounts aggregating the equivalent of $18.810,009 receivable as a result of revaluation of these currencies are not included in the "Amounts Paid in" columns. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix 0 Summary Statement f Loans |WORLD BANK| JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Effective loans held by Bank Members in whose territories loans have been made(') Disbursed Undisbursed Loans not yet portion portion(2) Total(3) effective(') Algeria ....................................... $ 19,040,000 $ - $ 19,040,000 $ - Argentina ....................................... 105,649,916 13,785,084 119,435,000 - Australia ....................................... 193,733,846 554,993 194,288,839 - Austria ................... ..... ...._..1 55,801,865 - 55,801,865 - Belgium ....................................... 38,994,346 - 38,994,346 - Brazil . . ..................................... 164,385,608 78,484,809 242,870,417 49,000,000 Burma ....................................... 23,201,658 518,909 23,720,567 - Ceylon ....................................... 28,332,533 2,484,166 30,816,699 - Chile . ...................................... 73,109,906 32,945,963 106,055,869 - China . . ..................................... 14,661,124 24,815,672 39,476,796 - Colombia ....................................... 233,322,814 75,676,186 308,999,000 41,700,000 Costa Rica . . ..................................... 29,571,673 8,933,683 38,505,356 - Cyprus . ...................................... 11,217,899 7,898,301 19,116,200 - Denmark . . . 41,984,572 2,520,585 44,505,157 - Ecuador . . . 33,450,450 5,955,717 39,406,167 - El Salvador . ...................................... 26,194,728 5,221,981 31,416,709 - Ethiopia . .......................... ............ 29,016,807 16,907,357 45,924,164 - Finland . . ..................................... 101,959,760 46,927,477 148,887,237 - France ....................................... 24,337,391 - 24,337,391 - Gabon . . ..................................... 8,287,221 3,297,779 11,585,000 - Ghana . . ..................................... 42,940,370 3,959,630 46,900,000 - Guatemala . ...................................... 7,109,000 - 7,109,000 - Guinea . ...................................... - 1,700,000 1,700,000 - Haiti . . ..................................... 1,226,000 - 1,226,000 - Honduras .................. ..................... 13,446,000 5,910,000 19,356,000 - Iceland ....................................... 4,287,833 - 4,287,833 - India ....................................... 531,177,393 162,534,641 693,712,034 - Iran .. . ........ .......... .... ...._.. 102,839,589 58,958,411 161,798,000 - Israel . . ..................................... 70,821,627 18,555,373 89,377,000 - Italy ....................................... 120,805,521 85,608,144 206,413,665 - Jamaica ....................................... - 5,218,000 5,218,000 22,000,000 Japan .... ................................. 452,628,330 198,201,294 650,829,624 - Kenya, Tanzania and Uganda (5) . . .. 4,258,935 33,741,065 38,000,000 - Lebanon ....................................... 22,901,991 - 22,901,991 - Liberia ....................................... 1,649,418 2,600,582 4,250,000 - Malaysia . . ..................................... 51,369,665 81,727,335 133,097,000 - Mexico . ...................................... 344,503,871 158,452,255 502,956,126 19,000,000 Morocco ....................................... 16,650,761 24,720,364 41,371,125 17,500,000 New Zealand ..................................... 41,543,433 54,536,035 96,079,468 - Nicaragua . . ..................................... 19,377,284 624,605 20,001,889 - Nigeria . ...................................... 46,343,995 106,390,999 152,734,994 - Norway . . ..................................... 79,674,457 16,651,266 96,325,723 - Pakistan . . ..................................... 154,151,135 157,690,539 311,841,674 - Panama . ..................... ................. 8,715,784 1,182,216 9,898,000 - Paraguay . . ..................................... - 4,890,000 4,890,000 2,100,000 Peru . .. 87,299,645 56,050,054 143,349,699 9,100,000 Philippines . ...................................... 58,143,204 41,242,282 99,385,486 - Portugal ....................................... 12,383.761 13,640,990 26,024,751 30,000,000 Sierra Leone . .................................... 2,806,658 753,342 3,560,000 - South Africa . . ................................... 27,293,154 - 27,293,154 - Spain . . ..................................... 22,576,726 112,589,686 135,166,412 - Sudan ........ . .............................. 60,846,068 32,820,932 93,667,000 - Thailand . ......................... ............. 101,865,182 50,032,513 151,897,695 36,000,000 Tunisia . . ..................................... 1,917,443 4,662,557 6,580,000 5,000,000 Turkey . ........................... 29,232,223 - 29,232,223 - United Arab Republic ... .. 41,250,080 - 41,250,080 - United Kingdom . . ............................... 104,812,788 17,360,281 122,173,069 - Uruguay . . . 49,662,874 25,002,126 74,665,000 - Venezuela ...................................... 77,905,953 142,171,047 220,077,000 - Yugoslavia . . ..................................... 155,427,752 78,165,986 233,593,738 - Totals .................................... $4,228,100,020 $2,085,273,212 $6,313,373,232 $231,400,000 LESS: Exchange adjustments ....... 14,290,250 14,290,250 $4,213,809,770 $6,299,082,982 (Continued) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix D Summary Slatement of Loans (Continued) JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F SUMMARY OF CURRENCIES REPAYABLE ON EFFECTIVE LOANS HELD BY BANK (1) Loans are made (a) to the member or (b) to a political sub- division or a public or a private enterprise in the territories of the member with the member's guarantee. Argentine pesos ................................$ 1,065,530 Australian dollars . ................. 65,297,009 (2) This does not include $8,428,102 of effective loans which Austrian schillings . ................ 13,532,920 the Bank has agreed to sell. Of the undisbursed balance, the Belgian francs . .................. 71,352,576 Bank has entered into irrevocable commitments to disburse Burmese kyats . ................. 1,238,050 $22,993,778. Canadian dollars . .................. 136,815,075 5 aCeylon rupees ........... . 623,854 (3) Original principal amount of loans signed $9,793,827,893 Danish kroner................... 17,667,981 Deutsche mark .521,351,518 DEDUCT: Finnish markkas. 8,490,689 (a) Cancellations, termina- French francs .134,935,875 tions and refundings. $ 210,197,599 Ghana cedis .................... 3,360,377 (b) Principal repayments to Indian rupees .31,685,137 the Bank ...... 1,074,802,299 Iranian rials.................... 9,250,833 teBn . ,7,0,9 Iraqi dinars. 1,748,100 (c) Loans sold or agreed Irish pounds .6,865,277 to be sold of which Israel pounds. 3,481,470 $8,428,102 has not Italian lire .68,329,683 yet been disbursed.. 1,964,054,763 Japanese yen................... 60,920,692 Kuwaiti dinars . 6,563,310 (d) Loans not yet effective. 231,400,000 3,480,454,661 Luxembourg francs. 2,518,364 $6,313,373,232 Malayan dollars. 7,321,917 LESS: Exchange adjustments . .14,290,250 Mexican ,pesos .21,745,314 Netherlands guilders .93,619,758 Effective loans held by Bank .a. $6,299,082,982 Norwegian kroner . ................ 16,287,443 Portuguese escudos . . . 1,427,895 (4) Agreements providing for these loans have been signed, Pounds sterling . .237,078,389 but the loans do not become effective and disbursements there- South African rand . .27,337,157 under do not start until the borrowers and guarantors, if any, Spanish pesetas . .16,219,324 take certain action and furnish certain documents to the Bank. Sudanese pounds .......... ...... 2,279,531 The Bank has agreed to sell $2,560,000 of loans not yet effective Swedish kronor . .18,822,191 and thus the total of both effective and non-effective loans sold Swiss francs . .190,358,674 or agreed to be sold is the equivalent of $1,966,614,763. New Taiwan dollars . .............2............ 2,659,887 United States dollars . .. 2,423,941,110 (5) Loan shared by members shown. Venezuelan bolivares . .1,643,362 Yugoslav dinars . .89,196 Disbursed portion of effective loans held by Bank ........................... $4,228,100,020 LESS: Exchange adjustments ................... 14,290,250 $4,213,809,770 ADD: Undisbursed portion of effective loans held by Bank ........................... 2,085,273,212 Effective loans held by Bank .................... $6,299,082,982 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix E Funded Debt o0 Ihe Dank _________ JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Principal Annual sinking Payable in Issue and maturity outstanding fund requirement(') United States Dollars 33/4% Notes of 1961, due 1966-67 ..... ....................................... $ 66,000,000 None* 41/4% Two Year Bonds of 1964, due 1966 ..................... 100,000,000 None* 43/8% Two Year Bonds of 1965, due 1967 ..................... 100,000,000 None* 4% Notes of 1962, due 1967 .......................... 5,000,000 None* 5'/4% Two Year Bonds of 1966, due 1968 ..................... 100,000,000 None* 4Ih% Notes of 1965, due 1968-71 ........................ 18,750,000 None* 47/8% Notes of 1966, due 1968-71 ........ ............... 16,000,000 None* 41/2% Twelve Year Bonds of 1960, due 1968-72 . .................. 120,000,000 None* 33/4% Ten Year Bonds of 1958, due 1968 ..................... 150,000,000 None* 4Y/a% Notes of 1964, due 1968-69 ................ ....... 60,000,000 None* 31/2% Fifteen Year Bonds of 1954, due 1969 .............................. .... 58,301,000 1967 $3,301,000 1968 $5,000,000 4Ih% Notes of 1965, due 1970 ........................................... .... 38,000,000 None* 3½/2% Nineteen Year Bonds of 1952, due 1971 ................................ 40,000,000 1967-70 $2,500,000 3% Twenty-Five Year Bonds of 1947, due 1972 ................................ 116,000,000 1967 $3,500,000 1968-72 $7,500,000 41/2% Fifteen Year Bonds of 1958, due 1973 ................................... 83,409,000 1967 $3,409,000 1968-73 $5,000,000 33/8% Twenty-Three Year Bonds of 1952, due 1975 ............................ 36,970,000 1967 $1,470,000 1968-74 $1,500,000 3% Twenty-Five Year Bonds of 1951, due 1976 ................................ 42,284,000 1967 $1,284,000 57/ 4/2% Twenty Year Bonds of 1957, due 1977 (2)..... , . , . ..... 77,151,000 1967-76 $5,000,000 4½/2% Fifteen Year Bonds of 1962, due 1977 ................................... 5,000,000 1973-77 $1,000,000 4Ih% Twenty-One Year Bonds of 1957, due 1978 .............................. 100,000,000 1967-71 $4,000,000 1972-77 $5,000,000 41/4% Twenty-One Year Bonds of 1958, due 1979 .............................. 150,000,000 1968-77 $7,000,000 1978 $5,000,000 43h% Twenty-Three Year Bonds of 1957, due 1980 (2) ..,,, 64,807,000 1968-79 $3,000,000 1980 $1,500,000 31/4% Thirty Year Bonds of 1951, due 1981 .................................... 98,000,000 1967 $2,000,000 1968-73 $3,000,000 1974-80 $4,000,000 4'/2% Twenty Year Bonds.of 1962, due 1982 .................................. 100,000,000 1972-81 $5,000,000 5% Twenty-Five Year Bonds of 1960, due 1985 ................................ 125,000,000 1970-79 $3,750,000 1980-84 $5,000,000 41/2% Twenty-Five Year Bonds of 1965, due 1990 .............................. 200,000,000 1975-79 $6,000,000 1980-89 $7,000,000 Sub-Total .................................................................. $2,070,672,000 (3)(4) Belgian Francs 5% Ten Year Bonds of 1959, due 1969 (BF500,000,000) ...................... $ 10,000,000 None Sub-Total .................................................................. $ 10,000,000 Canadian Dollars 31/2% Fifteen Year Bonds of 1954, due 1969 (Can$18,157,000) ............... $ 16,795,242 1967 Can$557,000 1968 Can$900,000 514% Twenty-Five Year Bonds of 1965, due 1990 (Can$25,000,000) . ..... 23,125,023 1978-89 Can$500,000 53h% Twenty-Five Year Bonds of 1966, due 1991 (Can$20,000,000) (2) ....... 18,500,018 None Sub-Total .................................................................. $ 58,420,283 Deutsche Mark 33h% Notes of 1961, due 1966-67 (DM120,000,000) .......................... $ 30,000,000 None* 41/% Notes of 1965, due 1968-71 (DM75,000,000) ........................... 18,750,000 None* 478% Notes of 1966, due 1968-71 (DM64,000,000) ........................... 16,000,000 None* 4V2% Bonds of 1960, due 1968-72 (DM500,000,000) ......................... 125,000,000 None* 4%% Notes of 1964, due 1968-69 (DM160,000,000) .......................... 40,000,000 None* 414% Notes of 1965, due 1969-70 (DM240,000,000) .......................... 60,000,000 None* 5% Bonds of 1959, due 1974 (DM160,000,000) ....... ....................... 40,000,000 1967-74 DM20,000,000 51/2% Bonds of 1965, due 1985 (DM250,000,000) (2) ..................... I .... 62,500,000 1971-84 DM17,000,000 1985 DM 12,000,000 $ 392,250,000 Less: bonds purchased (2) ....................,6............................... 3,630,000 Sub-Total ...... ................................................... $ 388,620,000 (4) (Continued) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix E Funded Debt o! the Bankl (Continued) JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements. Appendix F Principal Annual sinking Payable in Issue and maturity outstanding fund requirement(') Italian Lire 5% Bonds of 1961, due 1976 (Litl5,000,000,000) .$ 24,000,000 None Sub-Total .$ 24,000,000 Netherlands Guilders 31/2% Fifteen Year Bonds of 1954, due 1969 (f.11,564,000) .$ 3,194,475 1967 f.3,564,000 1968-69 f.4,000,000 31/2% Twenty Year Bonds of 1955, due 1975 (f.23,988,000) . .6,626,519 1967 f.2,468,000 1968-74 f.2,640,000 1975 f.3,040,000 41/2% Twenty Year Bonds of 1961, due 1981 (f.50,000,000) . .13,812,155 1972-81 f.5,000,000 41/2% Twenty Year Bonds of 1962, due 1982 (f.40,000,000) . .11,049,724 1973-82 f.4,000,000 Sub-Total .$ 34,682,873 Pounds Sterling 31/2% Twenty Year Stock of 1951, due 1971 (£3,034,835) .$ 8,497,538 1967 £144,476 1968-71 £166 700 31/2% Twenty Year Stock of 1954, due 1974 (£3,630,358) . .10,165,002 1966 £ 15,108 1967-74 £166,700 5% Twenty-Three Year Stock of 1959, due 1982 (£9,282,388) . .25,990,687 1967 £214,325 1968-82 £278,000 58 Sub-Total .$ 44,653,227 Swiss Francs 33/4% Loan of 1961, due 1968 (Sw F 50,000,000) .$ 11,634,671 None 4% Loan of 1961, due 1967 (Sw F 33,333,333) . .7,756,448 None 31/2% Fifteen Year Bonds of 1953, due 1968 (Sw F 50,000,000) 11,634,671 None 31/2% Fifteen Year Bonds of 1953 (Nov. Issue), due 1968 (Sw F 50,000,000)_ 11,634,671 None 31/2% Eighteen Year Bonds of 1954, due 1972 (Sw F 50,000,000) . .11,634,671 None 41/2% Twelve Year Bonds of 1960, due 1972 (Sw F 60,000,000) . .13,961,606 None 4% Eleven Year Bonds of 1962, due 1973 (Sw F 100,000,000) . .23,269,342 None 4% Fifteen Year Bonds of 1959, due 1974 (Sw F 100,000,000) . . 23,269,343 None 4% Fifteen Year Bonds of 1960, due 1975 (Sw F 60,000,000) . .13,961,606 None 31/2% Twenty Year Bonds of 1955, due 1976 (Sw F 38,000,000) ............... 8,842,350 1968-74 Sw F 4,000,000 1975-76 Sw F 5,000,000 4% Eighteen Year Bonds of 1961, due 1979 (Sw F 100,000,000) . .23,269,343 1971-78 Sw F 11,000,000 1979 Sw F 12,000,000 43/4% Eighteen Year Bonds of 1965, due 1983 (Sw F 60,000,000) . .13,961,605 None Sub-Total .$ 174,830,327 Gross Total .$2,805,878,710 (3)(4) (i) Each issue, except those indicated with an asterisk, is subject to $) In the cases of the 41/2% Twenty Year Bonds of 1957 and the 43/4% redemption prior to maturity at the option of the Bank at the prices and wenty-Three Year Bonds of 1957, the Bank will, as purchase funds, upon the conditions stated in the respective bonds. The amounts shown use its best efforts to purchase bonds of these issues in the open mar- as annual sinkingfund requirements are the principal amounts of bonds ket or by acceptance of tenders at prices up to and including 100% of to be purchased or redeemed to meet each year's requirement, except the principal amount plus accrued interest. The purchase funds will be that in the cases of the 31/2% Twenty Year Stock of 1951 and of 1954 and at the annual rate of $5,000,000 through 1966 in the case of the 41/2% the 5% Twenty-Three Year Stock of 1959 the amount shown is the Twenty Year Bonds of 1957 and at the annual rate of $3,750,000 amount of funds to be provided annually for purchase or redemption. through 1967 in the case of the 434% Twenty-Three Year Bonds of The amounts are shown after deduction of sinking fund requirements 1957. The purchase funds are cumulative on a month-to-month basis met as of the date of this statement. only within each calendar year. In the case of the 5%% Twenty-Five The following table shows the aggregate principal amount of the Year Canadian Dollar Bonds of 1966, a purchase fund of Can$300,000 maturities and sinking fund requirements each year for the five years is to be provided annually starting in calendar year 1968 through cal- following the date of this statement: endar year 1986. In the case of the 51/2% Deutsche Mark Bonds of 1965 the Bank intends to support the market for these bonds whenever it may appear appropriate from time to time. Period Amount (In June 1966 the Bank offered for sale in the United States $175 July 1, 1966 to June 30, 1967 ....................... $ 183,881,508 million 5%% Twenty-Five Year Bonds of 1966, due July 1, 1991 for July 1, 1967 to June 30, 1968 . .. .......... 499,648,874 settlement on July 13, 1966. July 1, 1968 to June 30, 1969 . .. .......... 282,693,805 July 1, 1969 to June 30, 1970 . ............. 178,976,948 (4) The Bank has arranged to refinance at maturity, August 1, 1966, July 1, 1970 to June 30, 1971 ................ 187.407.569 notes totaling $22 million and DM 40 million (U.S. equivalenx $10 million) by issuing new notes with an interest rate of 51/4% totaling Total .... $1,332,608,704 $16 million and DM 64 million (U.S. equivalent $16 million) maturing ......._________________ , ,,October 1, 1968. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix F Notes 1o FinancO al Statements |WRLD BANK}@1 JUNE 30, 1966 NOTE A of its currency depreciates to a significant extent in its territories, Amounts in currencies other than United States dollars have to maintain the value of the Bank's holdings of its restricted cur- been translated into United States dollars: rency, including the principal amount of any notes substituted therefor, and the Bank is required, if the par value of a mem- (i) In the cases of 71 members, at the par values as speci- ber'scurrencyis increased, to return tothe memberthe increase fied in the "Schedule of Par Values", published by the Inter- in the value of such restricted currency held by the Bank. To the national Monetary Fund; extent such restricted currencies are out on loan, the Bank and the members are obligated to make such payments only when (ii) In the cases of the remaining 32 members [Algeria, such restricted currencies are recovered by the Bank. Argentina, Bolivia, Brazil, Cameroon, Central African Republic, Chad, Chile, China, Colombia, Congo (Brazzaville), Democratic The equivalent of $18,810,009 is due from 4 members in order Republic of Congo, Dahomey, Gabon, Guinea, Ivory Coast, to maintain the value of their restricted currencies as required Kenya, Korea, Laos, Malagasy Republic, Mali, Mauritania, under Article II, Section 9. Nepal, Niger, Paraguay, Peru, Senegal, Tanzania, Togo, Some members have converted part or all of the Bank's holdings Uganda, Upper Volta and Viet-Nam], at the rates used by such of their restricted currency into United States dollars to be used members in making payments of capital subscriptions to the and reused as United States dollars in the Bank's operations, Bank; and subject to the right of the Bank or the member to reverse the (iii) In the case of Swiss francs and Indonesian rupiahs, non- transactions at any time, with immediate effect as to dollars then member currencies, at the rates of 4.2975 francs and 315 held by the Bank, and, as to dollars loaned, upon repayment of rupiahs, respectively, to 1 United States dollar. the loans. Such dollars while held by the Bank or on loan are not subject to the provisions of Article II, Section 9. Such dollars See also Notes B and C. held by the Bank or repayable on loans are shown in these fi- No representation is made that any currency held by the Bank is nancial statements under "United States dollars" and, where convertible into any other currency at any rate or rates. relevant, as "unrestricted". NOTE C NOTE B The principal disbursed and outstanding on loans and the ac- cruals for interest, commitment charge, service charge and loan These currencies of the several members, and the notes issued commission are receivable in United States dollars and other by them in substitution for any part of such currencies as per- currencies (for which the dollar equivalent is shown) as follows: mitted under the provisions of Article V, Section 12, are derived from the portion of the subscriptions to the capital stock of the Receivable in Bank which is payable in the currencies of the respective mem- U.S. dollars Other currency Total bers (such portion being hereinafter called restricted currency). Such restricted currencies may be loaned by the Bank, and funds Principal Outstanding. .. $2,423,941,110 $1,789,868,660 $4,213,809,770 received by the Bank on account of principal of loans made by Accrued Interest, Commitment the Bank out of such restricted currencies may be exchanged and Service for other currencies or reloaned, only with the approval in each Charges ....... 36,721,919 26,803,978 63,525,897 case of the member whose restricted currency is involved; pro- Accrued Loan Commissions.. 259,119 8,306 267,425 vided, however, that, if necessary, after the Bank's subscribed --- capital is entirely called, such restricted currencies may, without Total . $2,460,922,148 $1,816,680,944 $4,277,603,092 restriction by the members whose currencies are offered, be . __ used or exchanged for the currencies required to meet contrac- The dollar equivalent shown as principal outstanding includes tual payments of interest, other charges or amortization on the an amount which in accordance with Article II, Section 9, will be Bank's own borrowings or to meet the Bank's liabilities with re- receivable from members to maintain the value of their curren- spect to contractual payments on loans guaranteed by it. cies, and is net of an amount, equal to the increase in the value of their currencies, which in accordance with Article II, Section 9, Under Article II, Section 9, each member is required, if the par will be payable by the Bank to members, when such currencies value of its currency is reduced or if the foreign exchange value are recovered by the Bank. (Continued) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT / appendix F NOtes to Financial Slatements (Continued) JUNE 30, 1966 NOTE D NOTE G Amounts of commissions set aside pursuant to Article IV, Sec- In terms of United States dollars of the weight and fineness in tion 6, as a Special Reserve to be held in liquid form and to be effect on July 1, 1944. used only for the purpose of meeting liabilities of the Bank on its borrowings and guarantees. NOTE H /0 Subject to call by the Bank only when required to meet the obli- gations of the Bank created by borrowing or by guaranteeing loans. As to $17,941,120,000 the restriction on calls is imposed NOTE E by the Articles of Agreement; as to $2,242,640,000 by a resolu- NOTE E tion of the Board of Governors. On August 17, 1965, Indonesia withdrew from membership in the Bank. The resulting obligation to repurchase the shares of NOTE I Indonesiaisattheirvalueof$22,951,119.TheBankhassetaside The Bank has sold under its guarantee $69,003,844 of loans currency and notes of Indonesia amounting to $19,786,699, of which amount $65,881,844 has been retired. The following leaving a balance of $3,164,420 to be paid by the Bank. On table sets forth the maturities of the guaranteed obligations July 5, 1966 Indonesia applied for readmission to membership outstanding: in the Bank. Period Amount July 1, 1966 to June 30, 1967 ...................... $1,122,000 July 1, 1967 to June 30, 1968 ....... ......... 1,000,000 NOTE F July 1, 1968 to June 30, 1969 ...................... 1,000,000 In the current fiscal year this reserve has been charged with $3,643,795. Of this amount, $3,314,086 represents losses to Total ........................ $3,122,000 the Bank of $40,586 in Yugoslav dinars, $223,112 in Venezuelan bolivares and $3,050,388 in Indian rupees as a result of revalua- GENERAL tions on the books of the Bank of the balances of the amounts in As of June 30, 1966, the Board of Governors had approved the these currencies held at the dates of revaluation, July 1965, application of Singapore for membership with a capital subscrip- February 1966 and June 1966, respectively, and acquired from tion of $32.0 million. Singapore has until September 21, 1966 to net earnings. The balance, $329,709, represents a loss attrib- accept membership. uted to the demolition of a building which is to be replaced by a Also as of June 30, 1966, increases in subscriptions from eight new buildmng. members aggregating $140.1 million were in process of comple- tion. Of these increases, two members had completed payment Of the $142,782,081 net income available at June 30, 1966, and two members had made partial payment. The Syrian Arab the Executive Directors in July 1966 allocated $67,782,081 to Republic, which had made partial payment as of June 30, 1966, the Supplemental Reserve Against Losses on Loans and Guar- paid the balance due in July and its increase in subscription of antees and have recommended to the Board of Governors that $6.7 million became effective on July 13, 1966. an additional amount equal to the balance of $75,000,000 be transferred by way of grant to the International Development As of August 25, 1965, the authorized Capital Stock of the Bank Association. was increased by $2,000 million to $24,000 million. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT opinion ot Independen Auditor 1707 L STREET, N.W. WASHINGTON, D.C. 20036 July 28, 1966 To INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON, D.C. In our opinion, the accompanying financial statements present fairly, in terms of United States currency, the financial position of International Bank for Recon- struction and Development at June 30, 1966, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination of these statements 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. PRICE WATERHOUSE & CO. FINANCIAL STATEMENTS COVERED BY THE FOREGOING OPINION Balance Sheet ...................... appendix A (page 50) Comparative Statement of Income and Expenses .................... appendix B (page 52) Statement of Subscriptions to Capital Stock and Voting Power ....... appendix C (page 53) Summary Statement of Loans ........................................ appendix D (page 55) Funded Debt of the Bank ............................................. appendix E (page 57) Notes to Financial Statements ......................................... appendix F (page 59) I= - C=6 IDA Appendices page 15 A Stateme nt of Condition ................................................ 66 B Comparative Statement of Income and Expenses .................................... 67 C Statement of Holdings of Currencies and Obligations .................. ......... -.. 68 D Summary Statement of Development Credits .................................... 70 E Statement of Subscriptions, Voting Power and Supplementary Resources ........... 71 F Notes to Financial Statements .73 OPINION OF INDEPENDENT AUDITOR. 74 INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix A statement of condgiion JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F ASSETS Due from Banks and Other Depositories (See Appendix C) Member currencies Unrestricted .................. $ 35,091,258 Subject to restrictions-NOTE B ...... ............................ 55,308,606 $ 90,399,864 Investments Government obligations (At cost or amortized cost) Face amount $34,780,000 including $31,000,000 obligations of United States Government and its Instrumentalities ............. . $ 34,216,520 Accrued interest .................................................... 184,646 34,401,166 Receivable on Account of Subscriptions (See Appendix C) Non-negotiable, non-interest-bearing, demand obligations Unrestricted ..................................................... $122,870,761 Subject to restrictions-NOTE B ................................. 150,949,347 $273,820,108 Amount required to maintain value of currency holdings-NOTEC ...C 15,467,726 289,287,834 Receivable on Account of Supplementary Resources (See Appendix C) Non-negotiable, non-interest-bearing, demand obligations Unrestricted 219,132,692 Receivable from International Bank for Reconstruction and Development-NOTE D 78,900,000 Effective Development Credits Held by Association (including undisbursed balance of $565,865,875) (See Appendix D)-NOTE E... 1,247,453,222 Accrued Service Charge on Development Credits-NOTE E 1,268,286 Total .$1,960,843,064 LIABILITIES, SUBSCRIPTIONS, SUPPLEMENTARY RESOURCES, TRANSFERS AND ACCUMULATED NET INCOME Liabilities Accounts payable and other liabilities $ 387,577 Undisbursed balance of effective development credits (See Appendix D) ......... ..................................... 565,865,875 Subscriptions (See Appendix E)-NOTE F Amounts subscribed ..................... ........................... $999,145,000 Less portion for which payment is not yet due-NOTE G ........... 5,750,000 993,395,000 Supplementary Resources (See Appendix E)-NOTE F ...... I ......... $762,870,000 Less portion for which payment is not yet due-NOTE H ........... 496,490,000 266,380,000 Transfers from International Bank for Reconstruction and Development-NOTE D 125,000,000 Accumulated Net Income AtJune 30, 1965 .............. ........................ I...... $ 6,720,793 The period from July 1, 1965 to June 30, 1966 ..................... 3,093,819 9,814,612 Total .$1,960,843,064 INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix B ConMaraliVe StaterMRat Of InCOMe ang ExPenSeS FOR THE FISCAL YEARS ENDED JUNE 30,1965 AND JUNE 30,1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F July 1 to June 30 1964-1965 1965-1966 Income Income from investments .$3,340,800 $2,336,536 Income from development credits .2,144,797 4,115,676 Gross Income .$5,485,597 $6,452,212 6/ Expenses Administrative expenses: Personal services .$1,677,752 $2,044,829 Contributions to staff benefits .239,677 294,750 Fees and compensation .198,930 109,446 Representation .3,028 1,886 Travel ..., . . . . . . . .............................. 375,642 432,764 Supplies and material. .................,.,,.,,.,,,.............................. 29,028 31,557 Office occupancy .............,,. , .............................................. 165,377 212,220 Communication services .111,919 115,289 Furniture and equipment .47,210 70,739 Printing .29,739 22,463 Insurance ...... 17,977 22,106 Total Administrative Expenses .$2,896,279 $3,358,049 Exchange adjustments .................. , , ........................................... 7,201 344 Gross Expenses .................. , . .......................................... $2,903,480 $3,358,393 Net Income .$2,582,117 $3,093,819 INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix C Slatement of Holdings of Currencies and Obligations JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Non-negotiable. non-interest- bearing, demand obligations on account of Unit of initial Supplementary Member currency Currency Subscriptions Resources Total Afghanistan ....................... Afghani $ 606,000 $ 303,000 $ - $ 909,000 Algeria ....................... Dinar - 3,627,000 - 3,627,000 Argentina ....................... Peso 16,947,000 - 16,947,000 Australia ....................... Dollar 3,632,400 6,600,000 10,232,400 Austria ....................... Schilling - 947,969 1,680,000 2,627,969 Belgium ....................... Franc 153 1,155,000 2,750,000 3,905,153 Bolivia ....................... Peso Boliviano - 954,000 - 954,000 Brazil ....................... Cruzeiro 16,947,000 - - 16,947,000 Burma ....................... Kyat - 1,818,000 - 1,818,000 Burundi ....................... Franc 684,000 - 684,000 Cameroon . ................... Franc - 909,000 - 909,000 Canada . ...................... Dollar 2,276,917 4,533,898 13,900,000 20,710,815 Central African Republic . ............ Franc - 450,000 - 450,000 Ceylon . ..................... Rupee 2,727,000 - 2,727,000 Chad . ...................... Franc - 450,000 - 450,000 Chile . ...................... Escudo 3,177,000 - - 3,177,000 China . ..................... New Taiwan Dollar - 27,234,000 - 27,234,000 Colombia . ................... Peso 3,177,000 - - 3,177,000 Congo (Brazzaville) . .............. Franc - 450,000 - 450,000 Congo, Democratic Republic of ......... Franc 2,718,000 - - 2,718,000 Costa Rica ....................... Colon 180,000 - - 180,000 Cyprus ....................... Pound - 684,000 - 684,000 Dahomey ....................... Franc 450,000 - 450,000 Denmark ....................... Krone - 1,833,797 2,500,000 4,333,797 Dominican Republic .................... Peso 360,000 - - 360,000 Ecuador ....................... Sucre 585,000 - 585,000 El Salvador ....................... Colon 270,000 - - 270,000 Ethiopia ....................... Dollar - 450,000 - 450,000 Finland ....................... Markka 1,845,495 - - 1,845,495 France ....................... Franc 369,031 10,127,484 20,254,969 30,751,484 Gabon ....................... Franc - 450,000 - 450,000 Germany, Federal Republic of .......... Deutsche Mark 18,262,955 - - 18,262,955 Ghana ....................... Cedi - 2,124,000 - 2,124,000 Greece ....................... Drachma 2,268,000 - - 2,268,000 Guatemala ....................... Quetzal 360,000 - - 360,000 Haiti ....................... Gourde - 684,000 - 684,000 Honduras ....................... Lempira 270,000 - - 270,000 Iceland ....................... Krona - 90,000 - 90,000 India ....................... Rupee 57,120 23,000,000 - 23,057,120 Iran ....................... Rial - 4,086,000 - 4,086,000 Iraq ....................... Dinar - 684,000 - 684,000 Ireland .... ................... Pound - 2,181,600 - 2,181,600 Israel ....................... Pound - 907,200 - 907,200 Ivory Coast ....................... Franc ..909,000 - 909,000 Japan ....................... Yen 9,891 5,555,556 13,750,000 19,315,447 Jordan ....................... Dinar - 216,000 - 216,000 Kenya ....................... Shilling - 1,512,000 - 1,512,000 Korea ....................... Won 1,134,000 - - 1,134,000 Kuwait ....................... Dinar - 649,600 1,120,000 1,769,600 (Continued) INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix C Statement of Holdings of currencies and Ob11nations (Continued) JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Non-negotiable, non-interest- bearing, demand obligations on account of Unit of initial Supplementary Member currency Currency Subscriptions Resources Total Laos ............... Kip $ 210,000 $ 240,000 $ - $ 450,000 Lebanon ............... Pound 405,000 - - 405,000 Liberia ............... Dollar - 684,000 - 684,000 Libya ............... Pound - 909,000 - 909,000 Malagasy Republic ............... Franc 181,800 727,200 - 909,000 Malawi ............... Pound - 684,000 - 684,000 Malaysia ............... Dollar - 2,268,000 - 2,268,000 Mali ............... Franc 783,000 - - 783,000 Mauritania ............... Franc - 450,000 - 450,000 Mexico ............... Peso 7,790,281 - - 7,790,281 Morocco ............... Dirham - 3,177,000 - 3,177,000 Nepal ............... Rupee - 450,000 - 450,000 Netherlands ............... Guilder 9 6,291,543 5,500,000 11,791,552 Nicaragua ............... Cordoba 270,000 - - 270,000 Niger ............... Franc - 450,000 - 450,000 Nigeria ............... Pound - 3,024,000 - 3,024,000 Norway ............... Krone - 1,286,600 2,200,000 3,486,600 Pakistan ............... Rupee - 9,081,000 - 9,081,000 Panama ............... Balboa 3,598 - - 3,598 Paraguay ............... Guarani 270,000 - - 270,000 Peru ...........I.......... . . - 1,593,000 - 1,593,000 Philippines ............... Peso - 2,326,154 - 2,326,154 Rwanda ............... Franc 684,000 - - 684,000 Saudi Arabia ............... Riyal - 3,330,000 - 3,330,000 Senegal ............... Franc - 1,512,000 - 1,512,000 Sierra Leone ............... Leone - 684,000 - 684,000 Somalia ............... Shilling - 684,000 - 684,000 South Africa ............... Rand 4,610,660 - - 4,610,660 Spain ............... Peseta 7,264,800 1,816,200 - 9,081,000 Sudan ............... Pound - 909,000 - 909,000 Sweden ............... Krona - 1,506,914 12,677,723 14,184,637 Syrian Arab Republic ............... Pound 342,000 513,000 - 855,000 Tanzania ............... Shilling - 1,512,000 - 1,512,000 Thailand ............... Baht - 2,727,000 - 2,727,000 Togo ............... Franc 7 683,993 - 684,000 Tunisia ...................... Dinar - 1,359,000 - 1,359,000 Turkey ............... Lira - 5,220,000 - 5,220,000 Uganda ............... Shilling - 1,512,000 - 1,512,000 United Arab Republic.. ............. Pound - 4,572,000 - 4,572,000 United Kingdom ............... Pound 6,586,405 21,350,000 32,200,000 60,136,405 United States ............... Dollar 1,129,742 64,000,000 104,000,000 169,129,742 Upper Volta ............... Franc - 450,000 - 450,000 Viet-Nam ............... Piastre 1,359,000 - - 1,359,000 Yugoslavia ............... Dinar 3,636,000 - - 3,636,000 Zambia ............... Pound - 2,421,000 - 2,421,000 Totals .$90,399,864 $273,820,108 $219,132,692 $583,352,664 (1) Of this amount the equivalent of $377,094,711 is unrestricted and the equivalent of $582,230,435 is subject to maintenance of value-Note C. INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix D summary Statement of Development creoits JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Effective development credits held by Association Development Member in whose territories development Disbursed Undisbursed credits not yet credits have been made (') portion portion (r) Total effective (3) Afghanistan .................................................. - $ 3,500,000 $ 3,500,000 $ - Bolivia .7,892,854 7,107,146 15,000,000 - Burundi -..................................................- 1,100,000 1,100,000 - Chile. 9050,924 9,949,076 19,000,000 - China .13,110,240 92,145 13,202,385 - Colombia .11,760,137 7,739,863 19,500,000 - Costa Rica .2,887,842 2,612,158 5,500,000 - Ecuador..- 8,000,000 8,000,000 - G/ Ecudor -. .. .. .... . .... .. .... . .. .. . ... . ... . . ... . . .. .. ... ... .800,0.800,0 El Salvador .4,844,698 3,155,302 8,000,000 - Ethiopia .7,363,834 13,336,166 20,700,000 - Haiti . ............................................349,855 - 349,855 - Honduras..................................................... 7247552525 1,0,0 Honduras.7,224,785 5,275,215 12,500,000- India .452,086,381 132,383,619 584,470,000 91,000,000 Jordan .4,745,291 3,754,709 8,500,000 - Kenya .... ................................. 1,518,440 8,781,560 10,300,000 - Korea .13,992,924 - 13,992,924 - Mauritania .188,773 6,511,227 6,700,000 - Morocco .... . - 11,000,000 11,000,000 - Nicaragua. 2,994,834 5,166 3,000,000 - Niger .................................................. 88,148 1,411,852 1,500,000 - Nigeria ................................................. 2,305,478 33,194,522 35,500,000 - Pakistan .................................................. 84,259,516 225,980,484 310,240,000 13,000,000 Paraguay ................................................. 4,472,932 5,127,068 9,600,000 7,500,000 Somalia ................................................. - - - 6,200,000 Sudan. 9,763,195 3,236,805 13,000,000 - Syrian Arab Republic ............. ............................ 234,524 8,265,476 8,500,000 - Tanzania .................................................. 5,126,798 18,473,202 23,600,000 - Tunisia ................................................. 3,999,829 1,000,171 5,000,000 - Turkey .................................................. 27,102,080 38,595,978 65,698,058 - United Kingdom: Basutoland ................................................. - 4,100,000 4,100,000 - Bechuanaland Protectorate ................................. 1,423,035 2,176,965 3,600,000 - Swaziland ................................................. 2,800,000 - 2,800,000 Totals ................................................. $681,587,347 $565,865,875 $1,247,453,222 $117,700,000 (I) All development credits have been made to member governments or to the government of a territory of a member. (2) 01 the undisbursed balance the Association has entered into irrevocable commitments to disburse $2,610,426. (3) Agreements providing for these development credits have been signed, but the development credits do not become effective and disbursements thereunder do not start until the borrowertakes certain action and f urnishes certain documents to the Association. INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix E statement o1 Subscripiions, voting Power and SupPlementary Resources JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Supplementary Subscriptions(') Voting Power Resources Total Subscriptions Amounts and Member Total Amounts not yet Supplementary (Notes C Percent Number Percent paid in due Resources and F) of total of votes of total (Note C) (Note H) Australia ......................... $ 20,180,000 2.02 4,536 1.83 $ 6,600,000 $ 13,200,000 $ 39,980,000 Austria ......................... 5,040,000 .50 1,508 .61 1,680,000 3,360,000 10,080,000 Belgium ......................... 8,250,000 .83 2,150 .87 2,750,000 5,500,000 16,500,000 Canada ....................... 37,830,000 3.79 8,066 3.25 13,900,000 27,800,000 79,530,000 Denmark ...... ............... 8,740,000 .87 2,248 .91 2,500,000 5,000,000 16,240,000 Finland ......................... 3,830,000 .38 1,266 .51 766,000 1,532,000 6,128,000 France .......... 52,960,000 5.30 11,092 4.48 20,624,000 41,248,000 114,832,000 Germany, Federal Republic of.... 52,960,000 5.30 11,092 4.48 24,200,000 48,400,000 125,560,000 Italy . 18,160,000 1.82 4,132 1.67 10,000,000 20,000,000 48,160,000 Japan ......................... 33,590,000 3.36 7,218 2.91 13,750,000 27,500,000 74,840,000 Kuwait ......................... 3,360,000 .34 1,172 .47 1,120,000 2,240,000 6,720,000 Luxembourg .............. I ....... 375,000 .04 575 .23 125,000 250,000 750,000 Netherlands ...................... 27,740,000 2.78 6,048 2.44 5,500,000 11,000,000 44,240,000 Norway ......................... 6,720,000 .67 1,844 .74 2,200,000 4,400,000 13,320,000 South Africa ...................... 10,090,000 1.01 2,518 1.02 1,330,000 2,660,000 14,080,000 Sweden ............... 10,090,000 1.01 2,518 1.02 23,135,000 10,000,000 43,225,000 United Kingdom .................. 131,140,000 13.12 26,728 10.78 32,200,000 64,400,000 227,740,000 United States ............ .. 320,290,000 32.06 64,558 26.05 104,000,000 208,000,000 632,290,000 Total Part I Members ........... $751,345,000 75.20 159,269 64.27 $266,380,000 $496,490,000 $1,514,215,000 Afghanistan ...................... $ 1,010,000 .10 702 .28 $ - $ - $ 1,010,000 Algeria ......................... 4,030,000 .40 1,306 .53 - - 4,030,000 Argentina ......................... 18,830,000 1.88 4,266 1.72 - - 18,830,000 Bolivia ......................... 1,060,000 .11 712 .29 - - 1,060,000 Brazil ......................... 18,830,000 1.88 4,266 1.72 - - 18,830,000 Burma ......................... 2,020,000 .20 904 .37 - - 2,020,000 Burundi ............ ...... 760,000 .08 652 .26 - - 760,000 Cameroon ............ 1,010,000 .10 702 .28 - - 1,010,000 Central African Republic . 500,000 .05 600 .24 - - 500,000 Ceylon ......................... 3,030,000 .30 1,106 .45 - - 3,030,000 Chad .................. 500,000 .05 600 .24 - - 500,000 Chile ......................... 3,530,000 .35 1,206 .49 - - 3,530,000 China ......................... 30,260,000 3.03 6,552 2.64 - - 30,260,000 Colombia ......................... 3,530,000 .35 1,206 .49 - - 3,530,000 Congo (Brazzaville) ............... 500,000 .05 600 .24 - - 500,000 Congo, Democratic Republic of ... 3,020,000 .30 1,104 .45 - - 3,020,000 Costa Rica ........................ 200,000 .02 540 .22 - - 200,000 Cyprus ......................... 760,000 .08 652 .26 - - 760,000 Dahomey ......................... 500,000 .05 600 .24 - - 500,000 Dominican Republic .............. 400,000 .04 580 .23 - - 400,000 Ecuador ......................... 650,000 .06 630 .25 - - 650,000 El Salvador ....................... 300,000 .03 560 .23 - - 300,000 Ethiopia ......................... 500,000 .05 600 .24 - - 500,000 Gabon ......................... 500,000 .05 600 .24 - - 500,000 Ghana ......................... 2,360,000 .24 972 .39 - - 2,360,000 Greece ......................... 2,520,000 .25 1,004 .41 - - 2,520,000 Guatemala ....................... 400,000 .04 580 .23 - - 400,000 Haiti ......................... 760,000 .08 652 .26 - - 760,000 Honduras ........................ 300,000 .03 560 .23 - - 300,000 Iceland ......................... 100,000 .01 520 .21 - - 100,000 (Continued) INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix E Siatement oi subscriptions, voting Power and Supplemeniary Resources (Continued) JUNE 30, 1966 Expressed in United States Currency-See Notes to Financial Statements, Appendix F Supplementary Subscriptions(') Voting Power Resources Total Subscriptions Amounts and Member Total Amounts not yet Supplementary (Notes C Percent Number Percent paid in due Resources and F) of total of votes of total (Note C) (Note H) India .......................... $ 40,350,000(2) 4.04 8,570 3.46 $ - $ 40,350,000 Iran .......................... 4,540,000 .45 1,408 .57 - - 4,540,000 Iraq .......................... 760,000 .08 652 .26 - - 760,000 Ireland .......................... 3,030,000 .30 1,106 .45 - - 3,030,000 Israel .......................... 1,680,000 .17 836 .34 - - 1,680,000 Ivory Coast ....................... 1,010,000 .10 702 .28 - - 1,010,000 Jordan .......................... 300,000 .03 560 .23 - - 300,000 Kenya .......................... 1,680,000 .17 836 .34 - - 1,680,000 Korea .......................... 1,260,000 .13 752 .30 - - 1,260,000 Laos ................... ....... 500,000 .05 600 .24 - - 500,000 Lebanon .......................... 450,000 .04 590 .24 - - 450,000 Liberia .......................... 760,000 .08 652 .26 - - 760,000 Libya .......................... 1,010,000 .10 702 .28 - - 1,010,000 Malagasy Republic ............... 1,010,000 .10 702 .28 - - 1,010,000 Malawi .......................... 760,000 .08 652 .26 - - 760,000 Malaysia ......................... 2,520,000 .25 1,004 .41 - - 2,520,000 Mali .......................... 870,000 .09 674 .27 - - 870,000 Mauritania ....................... 500,000 .05 600 .24 - - 500,000 Mexico .......................... 8,740,000 .88 2,248 .91 - - 8,740,000 Morocco .......................... 3,530,000 .35 1,206 .49 - - 3,530,000 Nepal .......................... 500,000 .05 600 .24 - - 500,000 Nicaragua... ..................... 300,000 .03 560 .23 - - 300,000 Niger ................ .......... 500,000 .05 600 .24 - - 500,000 Nigeria .......................... 3,360,000 .34 1,172 .47 - - 3,360,000 Pakistan ............. ....... 10,090,000 1.01 2,518 1.02 - - 10,090,000 Panama .......................... 20,000 (3) 504 .20 - - 20,000 Paraguay ........ 300,000 .03 560 .23 - - 300,000 Peru .......................... 1,770,000 .18 854 .35 - - 1,770,000 Philippines ...................... 5,040,000(2) .50 1,508 .61 - - 5,040,000 Rwanda .......................... 760,000 .08 652 .26 - - 760,000 Saudi Arabia .................... ..3,700,000 .37 1,240 .50 - - 3,700,000 Senegal .......................... 1,680,000 .17 836 .34 - - 1,680,000 Sierra Leone ..................... 760,000 .08 652 .26 - - 760,000 Somalia .................. ...... 760,000 .08 652 .26 - - 760,000 Spain ...................... 10,090,000 1.01 2,518 1.02 - - 10,090,000 Sudan .......................... 1,010,000 .10 702 .28 - - 1,010,000 Syrian Arab Republic ............. 950,000 .09 690 .28 - - 950,000 Tanzania . ........ 1,680,000 .17 836 .34 - - 1,680,000 Thailand.......................... 3,030,000 .30 1,106 .45 - - 3,030,000 Togo .......................... 760,000 .08 652 .26 - - 760,000 Tunisia .......................... 1,510,000 .15 802 .32 - - 1,510,000 Turkey .......................... 5,800,000 .58 1,660 .67 - - 5,800,000 Uganda .......................... 1,680,000 .17 836 .34 - - 1,680,000 United Arab Republic ............ 5,080,000 .51 1,516 .61 - - 5,080,000 Upper Volta . ........... 500,000 .05 600 .24 - - 500,000 Viet-Nam . .............. 1,510,000 .15 802 .32 - - 1,510,000 Yugoslavia . ............. 4,040,000 .40 1,308 .53 - - 4,040,000 Zambia . ......................... 2,690,000 .27 1,038 .42 - - 2,690,000 Total Part II Members-NOTE B $247,800,000 24.80 88,560 35.73 $ - $ - $ 247,800,000 Grand Totals .............. .... $999,145,000 100.00 247,829 100.00 $266,380,000 $496,490,000 $1,762,015,000 (1) Paid in ful except Belgium and Luxembourg-Note G. (2) Amounts in the equivalent of $15,467,726 are due as a result of revaluation of these currencies. (3) Less than .005 percent. INTERNATIONAL DEVELOPMENT ASSOCIATION / appendix F Notes 10 FROancial sialements JUNE 30,1966 NOTE A The equivalent of $15,467,726 is due from two members in Amounts in currencies other than United States dollars have order to maintain the value of the Association's holdings of its been translated into United States dollars: ninety percent currency as required under Article IV, Section 2. (i) In the cases of 65 members, at the par values as speci- fied in the "Schedule of Par Values", published by the Inter- NOTE D national Monetary Fund; The International Bankfor Reconstruction and Developmenthas (ii) In the cases of the remaining 31 members [Algeria, authorized transfers, by way of grants, to the Association totaling Argentina, Bolivia, Brazil, Cameroon, Central African Republic, $125,000,000 from the net income of the Bank for the fiscal Chad, Chile, China, Colombia, Congo (Brazzaville), Democratic years ended June 30, 1964 and June 30, 1965. Of this amount, Republic of Congo, Dahomey, Gabon, Ivory Coast, Kenya, $46,100,000 has been received as of June 30, 1966. Korea, Laos, Malagasy Republic, Mali, Mauritania, Nepal, Niger, Paraguay, Peru, Senegal, Tanzania, Togo, Uganda, NOTE E Upper Volta and Viet-Nam], at the rates used by such members The principal disbursed and outstanding on development credits in making payments of subscriptions to the Association, and the accrued service charge are expressed in terms of United 13 / States dollars of the weight and fineness in effect on January 1, NOTE B 1960 and the equivalent is payable by the borrowers in curren- cies which the Association determines to be freely convertible or Pursuant to Article IV, Section 1 (a), these amounts may be used freely exchangeable by the Association for currencies of other by the Association for administrative expenses incurred by the members of the Association, except that such amount would be Association in the territories of any Part II member whose cur- reduced if (a) there is a uniform proportionate reduction in the rency is involved and, insofar as consistent with sound monetary par values of the currencies of all members of the International policies, in payment for goods and services produced in the ter- i Monetary Fund or (b) the Association so decides because of a ritories of such member and required for projects financed by substantial reduction in the value of one or more major curren- the Association and located in such territories; and in addition cies of members. The foregoing does not apply to a credit of when and to the extent justified by the economic and financial $9,000,000 which is expressed and is repayable in legal tender situation of the member concerned as determined by agreement dollars. between the member and the Association, such currency shall be freely convertible or otherwise usable for projects financed by NOTE F the Association and located outside the territories of the member. Subscriptions and supplementary resources are expressed in terms of U nited States dollars of the weight and fineness in effect NOTE C on January 1, 1960. Under Article IV, Section 2, each member is required, if the par value of its currency is reduced or the foreign exchange value of NOTE G its currency has in the opinion of the Association depreciated to This portion of the subscriptions of members, being that of Bel- a significant extent within that member's territories, to maintain gium and Luxembourg, is due in two equal instalments on or the value of the Association's holdings of its ninety percent cur- before November 8, in each of the years 1966 and 1967, and is rency, including the principal amount of any notes substituted payable in gold or freely convertible currency. therefor, and the Association is required if the par value of the. member's currency is increased, or the foreign exchange value NOTE H of the member's currency has in the opinion of the Association These supplementary resources are to be paid by Part I members appreciated to a significant extent within that member's terri- in freely convertible currencies in two equal instalments on or tories, to return to the member the increase in the value of such before November 8, in each of the years 1966 and 1967. In ad- ninety percent currency held by the Association; provided, how- dition, in July 1966, Sweden paid to the Association a further ever, that the foregoing shall apply only so long as and to the ex- contribution equivalent to $5,000,000. tent that such currency shall not have been initially disbursed or exchanged for the currency of another member. GENERAL Supplementary resources of theAssociation have, byagreement, As of June 30, 1966, the Board of Governors had approved the the same respective rights and obligations as to maintenance of applications for membership from Guinea and Trinidad and value as are set forth in Article IV, Section 2, of the Articles of Tobago with subscriptions of $1.01 million and $1.35 million the Association. respectively. INTERNATIONAL DEVELOPMENT ASSOCIATION OpInion Of IndePendeni AUditOr 1707 L STREET, N.W. WASHINGTON, D.C. 20036 July 28, 1966 TO INTERNATIONAL DEVELOPMENT ASSOCIATION WASHINGTON, D.C. In our opinion, the accompanying.financial statements present fairly, in terms of United States currency, the financial position of International Development As- sociation at June 30, 1966, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination of these statements was made in accord- ance with generally accepted auditing standards, and accordingly included review of the allocation of expenses incurred jointly with International Bank for Reconstruction and De- velopment, tests of the accounting records and such other auditing procedures as we considered necessary. PRICE WATERHOUSE & CO. FINANCIAL STATEMENTS COVERED BY THE FOREGOING OPINION Statement of Condition ........................................... appendix A (page 66) Comparative Statement of Income and Expenses .................... appendix B (page 67) Statement of Holdings of Currencies and Obligations ................. appendix C (page 68) Summary Statement of Development Credits ......................... appendix D (page 70) Statement of Subscriptions, Voting Power and Supplementary Resources ......................................... appendix E (page 71) Notes to Financial Statements ........................................ appendix F (page 73) |WORLD BANK Bank/IDA APPOOndiceS page 7, 1 Bank Loans and IDA Credits Classified by Purpose and Area..... . . . 76 2 Bank Loans and IDA Credits by Country .................... ............. 78 3 Administrative Budgets of the Bank and IDA 80 4 Governors and Alternates Bank/IDAn.D 81 5 Bank/IDA Executive Directors and Alternates and Their Voting Power.. . 83 6 Principal Officers of the Bank and IDA .. . 84 appendix 1 Dank Loans OnA IDA Credilt CUMULATIVE TOTAL Millions of U.S. Dollars, initial commitments net of cancellations and refunding. Total Purpose Bank and IDA Grand Total .......... ........................................................ $10,948.8 ELECTRIC POWER ............................................................ $ 3,368.5 TRANSPORTATION ............................................................ $ 3,781.9 Railroads ................................................................... 1,632.1 Roads ..................................................................... 1,594.9 Shipping .................................................................... 12.0 Ports and Waterways ................ ....................................... 406.9 Airlines and Airports ........................................................ 56.9 Pipelines .................................................................... 79.0 76 TELECOMMUNICATIONS ..................................................... $ 163.0 AGRICULTURE, FORESTRY AND FISHING ................................... $ 1,003.9 Farm Mechanization .161.7 Irrigation and Flood Control .639.7 Land Clearance, Farm Improvement, etc .62.7 Crop Processing and Storage .32.2 Livestock Improvement ..................................................... 88.7 Forestry and Fishing .18.9 INDUSTRY .$ 1,726.2 Iron and Steel .380.1 Paper and Pulp .132.2 Fertilizer and Other Chemicals .82.0 General Industries . 456.6 Mining .197.5 Development Finance Companies .477.7 WATER SUPPLY .$ 115.8 EDUCATION PROJECTS .$ 86.1 ENGINEERING LOANS .$ 1.7 GENERAL DEVELOPMENTM. ................................................... $ 205.0 POST-WAR RECONSTRUCTION ................................................ $ 496.8 NOTE: Detail may not add to totals because of rounding. Detailed Statements of Bank Loans and IDA Credits are available on request. ISSllel BY PUro Se Ong Area INE 30, 1966 Bank Loans by Area IDA Credits by Area Asia and Western Asia and Western Total Africa Middle East Australasia Europe Hemisphere Total Africa Middle East Europe Hemisphere $9,583.6 $1,244.6 $3,175.8 $ 519.8 $2,081.4 $2,561.9 $1,365.2 $ 145.1 $1,046.4 $ 65.7 $ 108.0 $3,260.3 $ 405.6 $ 682.1 $ 182.3 $ 576.5 $1,413.8 $ 108.2 $ - $ 67.5 $ 25.7 $ 15.0 $3,246.2 $ 545.2 $1,406.4 $ 181.4 $ 394.9 $ 718.3 $ 535.7 $ 75.4 $ 381.4 $ - $ 78.9 1,385.6 338.0 620.4 79.3 172.4 175.5 246.5 - 246.5 - - 1,333.2 119.6 544.0 50.9 116.5 502.2 261.7 75.4 107.5 - 78.9 12.0 - - - 12.0 - - - - - - 379.5 37.6 207.4 7.1 86.9 40.6 27.4 - 27.4 - - 56.9 - 5.6 44.1 7.2 - - - - - 79.0 50.0 29.0 - - - - - - $ 88.0 $ 9.2 $ - $ - $ 0.2 $ 78.6 $ 75.0 $ -$ 75.0 $ - $ - $ 744.9 $ 79.9 $ 258.0 $ 103.4 $ 87.8 $ 215.7 $ 259.0 $ 20.8 $ 207.1 $ 20.0 $ 11.1 133.7 4.1 2.0 89.4 2.0 36.2 28.0 1.0 27.0 - - 447.3 47.5 233.9 6.0 73.3 86.7 192.4 13.0 159.4 20.0 - 56.4 26.4 13.6 6.0 2.2 8.3 6.3 4.8 1.5 - - 11.0 1.1 - - 4.2 5.7 21.2 2.0 19.2 - 77.6 0.9 1.0 - - 75.7 11.1 - - - 11.1 18.9 - 7.6 2.0 6.2 3.1 - - $1,479.8 $ 163.0 $ 721.4 $ 52.7 $ 431.2 $ 111.5 $ 246.4 $ - $ 226.4 $ 20.0 $ 380.1 - 314.0 13.4 22.7 30.0 - - - - 132.2 - 4.2 1.1 106.9 20.0 - - - - 82.0 - 25.0 0.3 56.8 - - - - - 235.1 20.5 5.2 23.8 171.0 14.7 221.5 - 221.5 - 197.5 101.0 48.6 14.2 11.9 21.8 - - - - 452.8 41.5 324.4 - 61.9 25.0 24.9 - 4.9 20.0 $ 52.2 $ - $ 27.0 $ - $ 3.9 $ 21.3 $ 63.6 $ 1.1 $ 59.5 $ - $ 3.0 $ 8.8 $ - $ 6.0 $ -$ -$ 2.8 $ 77.3 $ 47.8 $ 29.5 $ -$ - $ 1.7 $ 1.7 $ -$ $ -$ - $ - $ -$ -$ $ - $ 205.0 $ 40.0 $ 75.0 $ -$ 90.0 $ - $ - $ -$ -$ $ - $ 496.8 $ - $ - $ -$ 496.8 $ - $ - $ -$ -$ $ - appendix 2 Bank LOanS and IDA creUMs Dy CountrY JUNE 30, 1966 Bank Loans IDA Credits Total Country Number Amount' Number Amount' Number Amount- Afghanistan .................................. - $ - 1 $ 3,500,000 1 $ 3,500,000 Algeria .................................... 3 80,500,000 - - 3 80,500,000 Argentina ................................... 2 125,351,234 - - 2 125,351,234 Australia .................................... 7 417,730,000 - - 7 417,730,000 Austria .................................... 9 104,860,083 - - 9 104,860,083 Basutoland .............. ............... 1 4,100,000 1 4,100,000 Bechuanaland ............................... - - 1 3,600,000 1 3,600,000 Belgium .................................... 4 76,000,000 - - 4 76,000,000 Bolivia .................................... - - 2 15,000,000 2 15,000,000 Brazil .................................... 16 395,534,660 - - 16 395,534,660 Burma ................... .......... ..... 3 33,289,050 - - 3 33,289,050 Burundi.1. ........................ 4,800,000 1 1,100,000 2 5,900,000 Ceylon .................... . . 3 38,299,409 - - 3 38,299,409 Chile .................................... 13 143,304,456 1 19,000,000 14 162,304,456 China .................................... 3 42,546,796 4 13,202,384 7 55,749,180 Colombia .................................... 27 430,605,441 1 19,500,000 28 450,105,441 Congo, Democratic Republic of ......... 5 91,582,854 - - 5 91,582,854 Costa Rica . . ................................. 7 47,676,356 1 5,500,000 8 53,176,356 Cyprus ................................ . . 1 20,451,200 - - 1 20,451,200 Denmark . . .................................. 3 85,000,000 - - 3 85,000,000 Ecuador . . .................................. 7 54,000,000 1 8,000,000 8 62,000,000 El Salvador . ................. ...... 7 50,279,769 1 8,000,000 8 58,279,769 Ethiopia . . .................................. 8 56,700,000 2 20,700,000 10 77,400,000 Finland . .................... .............. 13 221,580,180 - - 13 221,580,180 France ....................... -- ..... 1 250,000,000 - - 1 250,000,000 Gabon .................................... 2 47,000,000 - - 2 47,000,000 Ghana.. .............. 1 47,000,000 - - 1 47,000,000 Guatemala ................................... 1 18,200,000 - - 1 18,200,000 Guinea .................................... 1 1,700,000 - - 1 1,700,000 Guyana .................................. 1 919,017 - - 1 919,017 Haiti ................................. ... 1 2,600,000 1 349,855 2 2,949,855 Honduras ................................... 5 25,917,613 2 12,500,000 7 38,417,613 Iceland .................................... 6 7,914,000 - - 6 7,914,000 India ..................... ............... 34 971,905,798 19 675,470,000 53 1,647,375,798 Iran .................................... 8 263,199,991 - - 8 263,199,991 Iraq ..................................... 1 6,293,946 - - 1 6,293,946 Israel ............................ ........ 4 94,500,000 - - 4 94,500,000 Italy .................................... 8 398,028,000 - - 8 398,028,000 Ivory Coast(,) ................................ 1 7,091,567 - - 1 7,091,567 Jamaica .................................... 2 27,500,000 - - 2 27,500,000 Japan .................................... 30 757,041,004 - - 30 757,041,004 Jordan ............ ........................ - - 3 8,500,000 3 8,500,000 Kenya(b) .................................... 3 52,000,000 3 10,300,000 6 62,300,000 Korea .................................... - - 1 13,992,924 1 13,992,924 Lebanon .................................... 1 27,000,000 - - 1 27,000,000 Liberia .................................... 2 4,250,000 - - 2 4,250,000 Luxembourg .................................. 1 11,761,983 - - 1 11,761,983 (Continued) appendix 2 Bank Loans and IDA Credits BY country (Continued) JUNE 30, 1966 Baok Loans IDA Credits Total Country Number Amount' Number Amount' Number Amount' Malaysia .................................... 4 $ 133,500,000 - $ - 4 $ 133,500,000 Mali(a) .. Malta .................................... 1 7,500,000 - - 1 7,500,000 Mauritania .................................. 1 66,000,000 1 6,700,000 2 72,700,000 Mauritius ..... .............................. 1 6,973,119 - - 1 6,973,119 Mexico .................................... 18 625,327,888 - - 18 625,327,888 Morocco .................................... 4 60,000,000 1 11,000,000 5 71,000,000 Netherlands ... .............................. 10 236,451,985 - - 10 236,451,985 New Zealand ......... ...................... 4 102,114,000 - - 4 102,114,000 Nicaragua ................................... 12 35,742,003 1 3,000,000 13 38,742,003 Niger .................................... - - 1 1,500,000 1 1,500,000 Nigeria .................................... 6 185,500,000 2 35,500,000 8 221,000,000 Norway .................................... 6 145,000,000 - - 6 145,000,000 Pakistan .................................... 21 391,009,630 20 323,240,000 41 714,249,630 Panama ................................... 5 18,047,426 - - 5 18,047,426 Paraguay ...... 4 11,538,990 3 17,100,000 7 28,638,990 Peru .................................... 21 191,426,732 - - 21 191,426,732 Philippines ................................... 8 110,788,459 - - 8 110,788,459 Portugal .............. ...................... 5 57,500,000 - - 5 57,500,000 Rhodesia(C) ................................... 3 86,950,000 - - 3 86,950,000 Senegal(a) - - - - - - Sierra Leone ................................. 1 3,800,000 - - 1 3,800,000 Singapore .................................... 2 21,800,000 - - 2 21,800,000 Somalia.l .................................- - 1 6,200,000 1 6,200,000 South Africa ................ ................. 10 221,800,000 - - 10 221,800,000 Spain ............. ....................... 3 138,000,000 - - 3 138,000,000 Sudan .................................... 4 105,000,000 1 13,000,000 5 118,000,000 Swaziland .................................... 1 4,200,000 1 2,800,000 2 7,000,000 Syria .................................... - - 1 8,500,000 1 8,500,000 Tanzania(b) ........ ............. ............ 1 24,000,000 3 23,600,000 4 47,600,000 Thailand .................................... 15 228,147,572 - - 15 228,147,572 Trinidad & Tobago .... ...................... 1 23,500,000 - - 1 23,500,000 Tunisia ................................... 2 12,000,000 1 5,000,000 3 17,000,000 Turkey .................................... 6 60,684,967 6 65,698,058 12 126,383,025 Uganda(b) ... ............................ 1 8,400,000 - - 1 8,400,000 United Arab Republic ........................ 1 56,500,000 - - 1 56,500,000 Upper Voltaa)..- - - - - - Uruguay ....................... ............ 6 102,163,116 - - 6 102,163,116 Venezuela ....................... ............ 6 232,300,000 - - 6 232,300,000 Yugoslavia ................................... 8 260,700,000 - - 8 260,700,000 Zambia(C) ................................... 3 67,350,000 - - 3 67,350,000 Total 461 $9,583,630,294 89 $1,365,153,221 550 $10,948,783,515 (a) Loans shared with other countries marked (a). (b) Loans shared with other countries marked(b). (c) Loans shared with other countries marked (c). Net of cancellations, refundings and terminations. appendix 3 Adminisiralive ouugets ol the Dank and IDA FOR THE FISCAL YEAR ENDING JUNE 30, 1967 Actual Expenses 1966 Budget 1967 Bank IDA Total Bank IDA Total REGULAR OPERATIONS BOARD OF GOVERNORS ................. ... $ 578,429 $ - $ 578,429 $ 669,000 $ - $ 669,000 EXECUTIVE DIRECTORS ... .... 1,079,521 - 1,079,521 1,274,000 - 1,274,000 STAFF Personal Services . .............. $10,469,574 $ 2,044,829 $12,514,403 $12,676,000 $ 2,672,000 $15,348,000 Staff Benefits .... 1,755,068 294,750 2,049,818 2,138,000 405,000 2,543,000 Travel 2,400,306 432,764 2,833,070 2,581,000 491,000 3,072,000 Consultants 755,895 69,632 825,527 630,000 100,000 730,000 Representation ........ .............. 133,729 1,886 135,615 150,000 2,000 152,000 ........ i$15,514,572 $ 2,843,861 $18,358,433 $18,175,000 $ 3,670,000 $21,845,000 RESIDENT MISSIONS 379,173 - 379,173 475,000 - 475,000 COOPERATIVE PROGRAM WITH FAO 177,161 14,528 191,689 222,000 17,000 239,000 COOPERATIVE PROGRAM WITH UNESCO 19,658 3,467 23,125 24,000 7,000 31,000 OTHER ADMINISTRATIVE EXPENSES Fees and Compensation ............... $ 367,886 $ 21,819 $ 389,705 $ 481,000 $ 24,000 $ 505,000 Supplies and Material .193,236 31,557 224,793 241,000 47,000 288,000 Office Occupancy .................... 1,407,816 212,220 1,620,036 1,549,000 314,000 1,863,000 Communications. 704,908 115,289 820,197 841,000 167,000 1,008,000 Furniture and Equipment. 419,769 70,739 490,508 561,000 113,000 674,000 Printing ................... 358,634 22,463 381,097 420,000 30,000 450,000 Books and Library Services 213,777 - 213,777 269,000 - 269,000 Insurance .96,378 22,106 118,484 122,000 27,000 149,000 Other .28,262 - 28,262 27,000 - 27,000 $ 3,790,666 $ 496,193 $ 4,286,859 $ 4,511,000 $ 722,000 $ 5,233,000 CONTINGENCY .... - - - 200,000 50,000 250,000 Total Regular Operations ............ $21,539,180 $ 3,358,049 $24,897,229 $25,550,000 $ 4,466,000 $30,016,000 SERVICES TO MEMBER COUNTRIES Sector and Feasibility Studies ......... $ 3,929,028 $ - $ 3,929,028 $ 1,683,000 $ - $ 1,683,000 Economic Missions in Depth .......... 585,621 - 585,621 920,000 - 920,000 General Survey Missions ............ 170,144 - 170,144 22,000 - 22,000 Resident Missions .............. ...... 758,379 - 758,379 950,000 - 950,000 Advisory Missions ..................... 164,925 - 164,925 153,000 - 153,000 Cooperative Program with FAO ........ 479,625 - 479,625 616,000 - 616,000 Cooperative Program with UNESCO... 126,363 - 126,363 370,000 - 370,000 Economic Development Institute ...... 1,134,050 - 1,134,050 1,479,000 - 1,479,000 Training Program ... .......... ....... 16,716 - 16,716 40,000 - 40,000 Settlement of Investment Disputes .... 10,782 - 10,782 - - - Joint Coffee Study .................... 100,000 - 100,000 105,000 - 105,000 Other Services ............ ........... 792,863 - 792,863 764,000 - 764,000 Total Services to Member Countries. $ 8,268,496 $ - $ 8,268,496 $ 7,102,000 $ - $ 7,102,000 Totals $29,807,676 $ 3,358,049 $33,165,725 $32,652,000 $ 4,466,000 $37,118,000 The Administrative Budgets for the fiscal year ending June 30, 1967 were prepared by the President and approved by the Executive Directors in accordance with the By-Laws of the Bank and IDA. For purposes of comparison the administrative expenses incurred during the fiscal year ended June 30, 1966 are also shown. appendix 4 Governors ang AlternateS Of the BanK ang IDA JUNE 30, 1966 Member Governor Alternate Afghanistan .. ......... .......Abdullah Yaftaly Zia H. Noorzoy Algeria ..........................Ahmed Kaid Kamal Abdellah-Khodja Argentina .... ...... ......... ...Felipe Santino Tamil Antonio Mice le' Australia .........................William McMahon Sir Roland Wilson Austria ..........................Wolfgang Schmitz Hugo Rottky Belgium..........................R. Henrion Hubert Ansiaux Bolivia ..........................Luis Arce Pacheco Enrique Vargas Guzm6n Brazil ...........................Octavio Gouvaa de Bulhbes Denio Chagas Nogueira Burma ..._ _... .....__....._- U Kyaw Nyein U Kyaw Nyun Burundi ..................... ....Eric Manirakiza Bernard de Martrin-Donosi Cameroon ........ ............ ....Laurent Ntamag Joseph N. Owono' Canada ..........................Mitchell Sharp A. B. Hockin Central African Republic ..... ........... B. C. Ayandho A. Zanife Ceylon.. ........................U. B. Wanninayake H. Jinadasa Samarakkody Chad ...........................Georges Diguimbaye Boukar Abdoul Chile ...........................Carlos Massad Abud Jorge Marshall Silva 81 China ...........................Ching.yu Chen Kuo-Hwa Yu Colombia .........................Joaquin Vallejo Jorge Mejia-Salazar Congo (Brazzaville) ....................Bernard Banza Bouiti Jean Moumboulil Congo, Democratic Republic of ..............J. J. Litho Paul Mushiete Costa Rica.........................Raiil Hess Alvaro Verges E. Cyprus ..........................Renos Solomides M. E. Guven Dahomey .........................Christian Vieyra Stanislas Kpognon Denmark .........................Otto Muller Karl Otto Bredahl Dominican Republic ...................Di6genes H. Fern6ndez Luis M. Guerrero G6mez Ecuador..........................Marco Tulio Gonz6lez Gustavo Larrea C6rdova El Salvador ........................Francisco Aquino h. Abelardo Torres Ethiopia..........................Yilma Deressa Bulcha Demeksa Finland ..........................Mauno Koivisto Esko Rekola France ..........................Minister of Finance Bernard Clappier Gabon...........................Andr6 Gustave Anguil6 Michel Abessolo Germany, Federal Republic of ........... ...Kurt SchmUicker Rolf Dahlgriin Ghana ........................ ..Albert Adomakoh Greece..........................Constantine Mitsotakis N. N. Porphyrogenis Guatemala ........................Alberto Fuentes Mohri Francisco Fern6ndez Rivasi Guinea' ..........................Mousse Diakite Mamadou Fofana Haiti............................Herv6 Boyer Antonio Andr6 Honduras.........................Manuel Acosta Bonilla Ricardo Zuiniga Augustinus Iceland ..........................Gylfi Gislason Magnuis J6nsson India ...........................Sachindra Chaudhuri S. Bhoothalingam Iran ...........................Jamshid Amouzegar Jahangir Amuzegar Iraq............................Shukri Salih Zaki Abdul Rahman AI.Habeeb Ireland ..........................John Lynch T. K. Whitaker Israel ..........................David Horowitz Jacob Arnon Italy............................Guido Carli Paolo Baffi Ivory Coast ........................Konan B6di6 Mohamed Diawara Jamaica' .........................D. B. Sangster G. Arthur Brown Japan...........................Takeo Fukuda Makoto Usami Jordan ..........................Hatim S. Zulbi Najim Eldin Dajani Kenya...........................J. S. Gichuru John Njoroge Michuki Korea...........................Chung Yum Kim Se Ryun Kim Kuwait ..........................Sabah AI-Ahmad Al-Sabah Abdlatif Y. Al-Hamad Laos............................Sisouk Na Champassak Oudong Souvannavong (Continuecl) appendix 4 Governors and Alternates ot tie Bank and IDA (Continued) Member Governor Alternate Lebanon .... ...... .,.,.,........ ...... Andre Tueni Raja Himadeh Liberia ...., , . . .. ............................. Charles Du nbar Sherman Frank J. Stewart Libya ............. ....................... Shamsiddin Mohsen K. M. Sherlala Luxembourg ..... ........... ,, _ , Pierre Werner Pierre Guill Malagasy Republic ......... Rakotovao Ralison Louis Rakotomalala Malawi ......... , .... ......... J. Z. U. Tembo R. J. C. Wait Malaysia ..... .. Tan Siew Sin Mohamed Sharif bin Abdul Samad Mali ............................ ........ Louis-Pascal Negre Mauritania ....... ..............................,.. Mamadou Wane Birane Moktar Ould Haiba Mexico ...., , . . ............... Antonio Ortiz Mena Jose Hernandez Delgado Morocco . .........,....,.,.,.Mamoun Tahiri Mohamed Benkirane Nepal ............................ Surya BahadurThapa Yadav Prasad Pant Netherlands A............... . A .Vondeling J. H. 0. Count van den Bosch New Zealand2 .., . ............... .,,. ....... D. W. A. Barker N. V. Lough Nicaragua .................... ....... .... Guillermo Sevilla-Sacasa Silvio Arguello Cardenal Niger .................................. Barkire Alidou Karimou Goukoye Nigeria ............. Abdul Aziz Atta Ibrahim Maina Damcida Norway ....K........ ....,.,, Ka're Willoch Christian Brinch Pakistan ,.... Mohamed Shoaib Ghulam lshaq' Panama ................................ .... David Samudio A. Carlos Velarde Paraguay C.., , . .... ............6...... ... Cesar Romeo Acosta Oscar Stark Rivarola Peru ,..,,.. ......, .,.,,,,,.Celso Pastor Tulio De Andrea Philippines ............ . ,, . Andres V. Castillo Roberto S. Benedicto Portugal2 .. . ..... . .......... ... .... Ulises Cortez' Luis M. Teixeira Pinto Rwanda .... ,.,.,.,.Gaspard Cyimana Leon Mbarushimana Saudi Arabia, . ............. Ahmed Zaki Saad Senegal . .........,. . . . Habib Thiam Ibrahima Tal Sierra Leone ..........,.. , .R. G. 0. King Sheikh Batu Daramy Somalia ............. Ali Omar Scego Francesco Palamenghi-Crispi South Africa ............. T. E. Donges Gerard Rissik Spain .... ................................ Juan Jose Espinosa Mariano Navarro Rubio Sudan .... , ,,, Hussein El Sharif Yousif El Hindi Sayed Abdel Rahim Mirghani Sweden .G. E. Strang N. G. Lange Syrian Arab Republic M................ ... .... Mouaffaq Shourbaji Abdul Hadi Nehlawi Tanzania ............ A. H. Jamal A. J. Nsekela Thailand ..... Serm Vinicchayakul Bisudhi Nimmanahaeminda Togo . , , ....,,,,,,.... , Boukari Djobo Jean B. Tevi Trinidad and Tobago2 A. N. R. Robinson William Demas Tunisia .......... Ahmed Ben Salah Ali Zouaoui Turkey .... lhsan Gursan Zeyyat Baykara Uganda ... .,, ., . Laurence Kalule-Settala A. J. P. M. Ssentongo United Arab Republic Abdel Moneim El Kaissouni Hamed Abdel Latif El Sayeh United Kingdom L. K. O'Brien' Sir Denis Rickett United States ......... , ............ Henry H. Fowler Thomas C. Mann Upper Volta .............,....... Pierre-Claver Damiba Pierre Tahita Uruguay2 ............ Dardo Ortiz Hector Lorenzo Rios Venezuela2 ....... ,. . Rafael Alfonzo Ravard Eloy Anzola Montauban Viet-Nam ..... Nguyen Huu Hanh' Nguyen Van Dong' Yugoslavia , ,, ., Kiro Gligorov Milenko Bojanic Zambia .A. N. L. Wina Lishomwa Mubita Lishomwa lAppointment effective after June 30, 1966. 2Not. member of IDA. appendix 5 Bank/IDA EXeCutive Directors and Allernates ot the Bank and IDA and Their Voting Power JUNE 30, 1966 Executive Director Alternate Casting Votes of Total VDtes A PPOIN TED Livingston T, Merchant Bernard Zagorin United States. 63,750 64,558 J. M. Stevens Robert E. Radford United Kingdom ............ ......... 26,250 26,728 Otto Donner Helga Steeg Germany, Federal Republic of 13,050 11,092 Rene Larre Jean Malaplate France 10,750 11,092 K. S. Sundara Rajan S. Guhan India 8,250 8,570 ELEC TED Joaquin Guti6rrez Cano Felice Gianani Italy, Spain, Portugal', Greece .11,627 7,654 (Spain) (Italy) Gengo Suzuki Chalong Pungtrakul Japan, Thailand, Ceylon, Burma, Nepal .11,316 10,934 (Japan) (Thailand) M. W. O'Donnell T. J. Bartley Australia, South Africa, New Zealand', Viet-Nam 10,430 7,856 (Australia) (Australia) Mumtaz Mirza Ali Akbar Khosropur2 Pakistan, United Arab Republic, Iran, Saudi Arabia, Kuwait, (Pakistan) (Iran) Iraq, Syrian Arab Republic, Jordan, Lebanon . ....... .... 9,720 10,346 83/ L. Denis Hudon Patrick M. Reid Canada, Ireland, Jamaica' ..9,423 9,172 (Canada) (Canada) Andr6 van Campenhout Othmar Haushofer Belgium, Austria, Turkey, Korea, Luxembourg . .9,217 6,645 (Belgium) (Austria) Pieter Lieftinck Zoran Zagar Netherlands, Yugoslavia, Israel, Cyprus . . ............ 8,676 8,844 (Netherlands) (Yugoslavia) Vilhjalmur Thor Odd H0kedal Sweden, Denmark, Norway, Finland, Iceland . . 8,466 8,396 (Iceland) (Norway) Reignson C. Chen China ................................ 7,750 6,552 (China) John Mamman Garba S. Othello Coleman Nigeria, Congo (Democratic Republic of), Sudan, Kenya, (Nigeria) (Liberia) Tanzania, Uganda, Trinidad and Tobago', Guinea', Mali, Burundi, Liberia, Sierra Leone, Ethiopia . .7,306 8,716 Jorge Mejia-Palacio Jose Camacho Brazil, Philippines, Colombia, Ecuador, Dominican Republic. 7,220 8,190 (Colombia) (Colombia) Luis Machado Rufino GiI3 Mexico, Venezuela', Peru, Haiti, Costa Rica, El Salvador, (Cuba) (Costa Rica) Guatemala, Panama, Honduras, Nicaragua 7,031 7,058 Manuel San Miguel Juan Haus-Solis Argentina, Chile, Uruguayl, Bolivia, Paraguay . .6,466 6,744 (Argentina) (Bolivia) Abderrahman Tazi Taoufik Smida Malaysia, Algeria, Morocco, Ghana, Afghanistan, Tunisia, (Morocco) (Tunisia) Libya, Laos....... 6,200 7,294 Mohamed Nassim Kochman Said Mohamed Ali Senegal, Cameroon, Ivory Coast, Malagasy Republic, Rwanda, (Mauritania) (Somalia) Somalia, Togo, Central African Republic, Chad, Congo (Brazzaville), Dahomey, Gabon, Mauritania, Niger, Upper Volta. . 5,933 9,698 In addition to the Executive Directors and Alternates shown in the foregoing list, the following also served as Executive Director or Alternate after June 30, 1965: Executive Director End of Period of Service Alternate End of Period of Service John C. Bullitt August 10, 1965 Sergio Siglienti August 16, 1965 (United States) (Italy) John M. Garland January 17, 1966 A. J. J. van Vuuren August 31, 1965 (Australia) (South Africa) Aleksandar Bogoev September 15, 1965 (Yugoslavia) Chedly Ayari October 14, 1965 (Tunisia) A. M. de Villiers March 6, 1966 (South Africa) 'Not a member of IDA. 2Succeeded by Abdol-Ali Jahanshahi (Iran), effective July 5, 1966. 3Resigned Mith effect from August 11, 1966. appendix 6 Principal Olicers ol the Bank and IDA (August 1, 1966) George D. Woods ............ President J. Burke Knapp* ............ Vice President and Chairman, Loan Committee S. Aldewereld* .... ...... Vice President and Director, Projects Departmenf A. Broches* ...... .. General Counsel Richard H. Demuth* ......... Director, Development Services Department Irving S. Friedman* .......... The Economic Adviser to the President and Chairman, Economic Committee S. R. Cope .. .. ...... . Director, Europe and Middle East Department and Deputy Chairman, Loan Committee John H. Adler ................ Director, Economic Development Institute Gerald Alter .................. Director, Western Hemisphere Department Dragoslav Avramovic ......... Director of Special Economic Studies 1. P. M. Cargill ......... ...... Director, Asia Department Robert W. Cavanaugh . . Treasurer Bernard Chadenet ........... Associate Director, Projects Department. Federico Consolo ............. Special Representative for U.N. Organizations Abdel G. El Emary ......... Director, Africa Department Harold N. Graves, Jr ......... Director of Information Michael L. Hoffman ......... Associate Director, Development Services Department Howard C. Johnson** ........ Director, New York Office Andrew M. Kamarck ......... Director, Economics Department Michael L. Lejeune ........... Director of Administration M. M. Mendels .............. Secretary John D. Miller ........ ....... Special Representative in Europe Leonard B. Rist .............. Special Adviser to the President Orvis A. Schmidt ............. Special Adviser to the President Alexander Stevenson ........Associate Director, Asia Department -Member, the President's Council. Mr. Cope serves as Mr. Knapp's Alternate on the President's Council. --Not an officer of iDA. 2> .' N~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~....... i2,22 s~' Kj < NI N ' ' 722 2 IA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A N ff ,s -I ;NN n2 / I I'N-1 iI iI II; , N, 2" ~~~~~~~~~2' '22'' '7 2 ''i' , 1 m 227 22'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i KII, IN",~~~~~~~~~~~~, / NV >~~~~~~~~~~~~~~~~~~~i1 j i In~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I S 2 '2 0 ', I 2'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~)il N / NN~~~~~~~~~~~~N 'N '~~~~~~~~~~~ 2' N~~~~I4 EN? to~~~~~~~~~~~~~' ni 2 VI, 'N VN ''22 , <1/'N' 2"'~,~ V'/ N1~~S""/ '2 'NIfl / 2222. N,,\1''''' 7 {2' ' \'' N VI W 2 22,' \ 'N /2 7/ \ / N,, 2,''!,>~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~es Ji k ~ 72,'I 5~ 2II' N\NN,N" 7 'K ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~j 2> ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~ , 'K>' 2>,', N~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ER 7 2 2~~~~~~~~~~~~~~~~~~~~~~~s J '2~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I ~ Ul~~~~~~~~~~~~~~~~~~~~'2 xN '2>2 Ax~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C 0 l f Da ff ff% DD? 0 ;,': '' ; ': 0''S. t:M S'.d000T ' ' ;L.'' ,,' f ,ff'' ' In I/ ' N i' ; - ~~' \ 7'/- I IA,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 0~~ ~~~~ N N CD ;00 ;4 , 00'; .':'' ", ' 0 ' 0 , . .0 0; , . ; 4 ; ' $ t \ , t 0 O 2 , NNCD I' 1 0 ' N1'Y ' ..~~~~~~~~~~~~~~ I 0;' k '3 00'-::2''' , , ,,, . ;'; b . ., 'N , , , -,' ,j1, , < 5 .,0 ;2';, ''s ' ' \ <',, ,4'''! ' ,'J 'C ' HEADQUARTERS 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Telephone: EXecutive 3-6360 NEWYORK OFFICE 20 Exchange Place New York, N.Y. 10005, U.S.A. Telephone: WHitehall 3-5400 EUROPEAN OFFICE 4 Ave. d'l6na Paris 1 6e, France Telephone: KLEber 25-10 LONDON OFFICE New Zealand House Haymarket London S.W. 1, England Telephone: WHitehall 3886-7 Cable Addresses World Bank: INTBAFRAD IDA: INDEVAS