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The economic use of international resources in financing development projects by Leonard Rist,World Bank Special Representative for Africa (English)

This report presents the remarks delivered by Leonard Rist, World Bank Special Representative for Africa. This paper confine himself on the discussion of the appraisal techniques which we at the World Bank have, over the past fifteen years, learned to apply in our own lending for development projects. However, he believes that most of these techniques are applicable in virtually all development financing; certainly we have found they need very little modification to act as a satisfactory guide for putting the ‘soft loan’ resources of the International Development Association to work. Three questions are involved: how much can a country borrow from abroad; what sector should it preferably invest in; and how can individual projects be justified, mainly from an economic standpoint. Finally, one must recognize that government policies do have a major influence on a country's balance of payments, and thus on its ability to carry additional external debt. Creditworthiness depends importantly upon the success with which a government keeps the over-all demand for foreign exchange within the limits set by exports, invisible earnings and the proceeds of external borrowing and foreign aid. It will find this very difficult, if it adopts inflationary policies, since these tend to stimulate imports, to hamper exports, and so to encourage running-down of reserves or accumulation of short-term foreign obligations. It will find this difficult, too, unless it is prepared to face the unpleasant adjustments which are sometimes made necessary by a sudden fall in export earnings, a circumstance with which most of the primary producing countries have become only too familiar in recent years.


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    The economic use of international resources in financing development projects by Leonard Rist,World Bank Special Representative for Africa

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The economic use of international resources in financing development projects by Leonard Rist,World Bank Special Representative for Africa (English). Speech Washington, D.C. : World Bank Group.