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Page 1: THE INTERNATIONAL FINANCE CORPORATIONcdn.un.org/unyearbook/yun/chapter_pdf/1961YUN/1961_P2_CH7.pdf · THE INTERNATIONAL FINANCE CORPORATION ... was made in KSB Pumps, Ltd., ... Poona,

THE INTERNATIONAL FINANCE CORPORATION

CHAPTER VII

THE INTERNATIONAL FINANCE CORPORATION (IFC)

631

Investments made by the International FinanceCorporation (IFC)1 rose to a total of $57.8million in 18 countries by the end of 1961.Total membership of IFC rose to 60 countriesduring the year, with a total subscribed capitalof $96.3 million. Nigeria joined on 30 March;the Dominican Republic rejoined on 31 Oc-tober; and Indonesia withdrew from member-ship on 6 November.

The Corporation's Board of Governors heldits fifth annual meeting in Vienna, Austria, on21 September 1961.

AMENDMENT TO CHARTERDuring 1961, the Board of Governors agreed

to a resolution amending the Corporation'sCharter. The amendment was to enable IFC tomake equity investments. With the right toinvest in equity as well as make loans, IFCexpected to be able to provide increasing flexi-bility of financing to meet the varied needs ofprivate enterprise in the developing countriesand attract more private investors to participatein those investments. The Corporation's estab-lished policy, neither to exercise control overnor to participate in the management of anyenterprise in which it invests, was to continuein force.

INVESTMENT OPERATIONSDuring 1961, the International Finance Cor-

poration made 10 investments aggregating theequivalent of $16.1 million. By 31 December1961, the Corporation had made 45 investmentstotalling $57.8 million in 18 member countries.Of the 10 projects in which IFC invested during1961, three were owned and managed by resi-dents in the country where the project was beingcarried out, five were joint enterprises of localand foreign ownership and management, andtwo were subsidiaries of foreign firms. The sizeof the enterprises helped by IFC during thecalendar year 1961 ranged from the equivalentof about $600,000 to $72 million, with IFC'sown investments ranging from $170,000 to $4million. The Corporation's investments during

the year continued to cover a wide variety ofindustrial operations.

Argentina. Two commitments were made.One, for $1,500,000, in Fabrica Argentina deEngranajes, S.A.I.C. (FADESA), was to helpfinance the construction of a plant for themanufacture of fully-assembled transmissionunits and gears for tractors, trucks and auto-mobiles. The second, for $3,050,000, in PasaPetroquímica Argentina, S.A.I.C., was to helpbuild an integrated petro-chemical complex,some 230 miles north of Buenos Aires, to convertnatural gas into synthetic rubber and certainrubber chemical intermediates, all of which wereat the time being imported.

Colombia. Four investments were made. Thefirst, for $170,000, in Berry, Selvey y Cia., S.A.,was to help the company in a programme ofexpansion and modernization of home furnitureand furniture components. The second, for$500,000, in Electromanufacturas, S.A., was tohelp finance an expansion of electrical equip-ment manufacturing. The expansion was toproduce new lines to include fuse cut-outs,lightning arresters, capacitators and weldingequipment. The third and fourth commitments,each for $2,000,000, were made to CorporaciónFinanciera Colombiana de Desarrollo Industrialand to Corporación Financiera Nacional, res-pectively. These were IFC's first investments infinancial institutions. Organized in 1958 and1959, the two Colombian corporations havebeen helping in financing the development ofindustry in Colombia by providing primarilymedium- and long-term capital and by stimulat-ing the growth of the Colombian capital market.As a result of the IFC's investments, both institu-tions were enabled to undertake equity andlong-term financing and expand their under-writing activities.

India. An IFC investment, for $1,575,000,was made in KSB Pumps, Ltd., to help finance

1 For further information, see previous volumes ofY.U.N., annual report of IFC Board of Directors toIFC Board of Governors and summary proceedingsof annual meeting of IFC Board of Governors.

Page 2: THE INTERNATIONAL FINANCE CORPORATIONcdn.un.org/unyearbook/yun/chapter_pdf/1961YUN/1961_P2_CH7.pdf · THE INTERNATIONAL FINANCE CORPORATION ... was made in KSB Pumps, Ltd., ... Poona,

632 THE INTER-GOVERNMENTAL ORGANIZATIONS

the construction and operations of a plant nearPoona, for the manufacture of pumps designedfor a variety of local needs.

Jamaica. A private enterprise producingready-mixed concrete received an IFC invest-ment of $224,000 to increase its production from20,000 to about 60,000 cubic yards per year. Thecompany was also acquiring a plant to processits own sand and gravel.

Pakistan. An IFC investment of $4 millionwas made in Ismail Cement Industries, Ltd., tobuild a new Portland cement plant in anticipa-tion of an increased demand for cement result-ing from the development programme of theIndus Basin. The new plant was to have twokilns designed to provide a rated annual ca-pacity of about 416,000 tons of cement. ThePakistan Government was to build rail androad links to the site of the factory.

Peru. There was an IFC investment of$2,400,000 to Cemento Andino, S.A. to assistthe company to more than double its presentPortland cement capacity of 250 tons a day,modify its process and add production of mason-ry cement hitherto not produced in Peru.

MANAGEMENT CHANGESChanges in the management and powers of

the Corporation came into effect during 1961.Martin M. Rosen, formerly the InternationalBank's Director of Operations for the Far East,took up the new post of Executive Vice-Chair-man of IFC on 1 June 1961; Robert L. Garnerretired from the position of President of theCorporation on 15 October 1961; and EugeneR. Black, President of the Bank since 1949,assumed the additional post of President of IFC.

FINANCIAL OPERATIONSDuring the calendar year 1961, IFC received

$387,000 as repayment of principal, bringingtotal principal repaid to $427,000. IFC also re-ceived over $452,000 in addition to fixed in-terest, as payment of contingent interest andprofit sharing, bringing the total received to$456,000.

SALES AND PARTICIPATIONSDuring the year, IFC sold its entire holdings

in three operational investments, totalling$2,457,000. In addition, IFC sold participationstotalling $1,172,000 in three other investments.These transactions raised the amount of invest-ments sold to $9.1 million.

INCOME AND RESERVES

Gross earnings for the year ending 31 De-cember 1961 totalled $4.3 million; after deduc-tion of administrative expenses of $2 million, netincome for the year came to $2.3 million. Netprofits from sales of investments during 1961totalled $447,000. Disbursements against theCorporation's investments during the yearamounted to $8.4 million. Accumulated net in-come, which was transferred to a reserve againstlosses, totalled $11.8 million as of 31 December1961.

STATEMENT OF INCOME AND EXPENSES(1 July 1960-30 June 1961)

IncomeIncome from United States Government

obligationsIncome from operational investments

Gross Income

ExpensesAdministrative expenses:

Personal servicesContributions to staff benefitsFees and compensationRepresentationTravelSupplies and materialOffice occupancyCommunication servicesFurniture and equipmentBooks and library servicesPrintingInsuranceOther expenses

Gross Expenses

Net Income

U.S. Dollars

2,509,1561,868,525

4,377,681

1,161,127135,165149,98232,436

268,67618,531

103,59551,73945,64715,92323,360

9,508382

2,016,071

2,361,610

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THE INTERNATIONAL FINANCE CORPORATION

ANNEX I. MEMBERS OF INTERNATIONAL FINANCE CORPORATION,SUBSCRIPTIONS, BOARD OF GOVERNORS AND VOTING POWER

(As of 31 December 1961)

SUBSCRIPTIONS

633

Amount (in Per CentThousands of

MEMBER U.S.

AfghanistanArgentina

AustraliaAustriaBelgiumBoliviaBrazil

BurmaCanadaCeylon

ChileColombia

Costa RicaDenmarkDominican RepublicEcuadorEl SalvadorEthiopiaFederation of

MalayaFinlandFranceGermany, Fed.

Rep. ofGhanaGreeceGuatemala

HaitiHondurasIcelandIndiaIranIraqIrelandIsraelItalyJapanJordanLebanonLibyaLuxembourgMexicoNetherlandsNew ZealandNicaragua

Nigeria

NorwayPakistan

Dollars)111

1,662

2,215544

2,49278

1,163

1663,600

166

388388

22753

22351133

277

4215,8153,655

166277

22

221111

4,431372

6733250

1,9942,769

335055

111720

3,046923

9

369

5541,108

ofTotal0.121.73

2.300.582.590.081.21

0173.740.17

0.400.40

0.020.780.020.040.010.030.29

0.446.033.80

0.170.290.02

0.020.010.014.600.390.070.350.052.072.880.030.050.060.120.753.160.960.01

0.38

0.581.15

VOTING POWER

BOARD OF GOVERNORS Number ofGovernor

Abdullah MalikyarEustaquio Méndez

DelfinoHarold E. HoltJosef KlausAndré DequaeHumberto Fossati RochaClémente Mariani

BittencourtThakin TinDonald M. FlemingFelix R. Dias

BandaranaikeEduardo FigueroaHernando Agudelo

VillaAlvaro CastroOtto MullerManuel V. RamosLeonardo StaggFrancisco AquinoMenasse LemmaTan Siew Sin

R. v. FieandtMinister of FinanceLudwig Erhard

F. K. D. GokaGregory CassimatisManuel A. Bendfeldt

JáureguiHervé BoyerCeleo DávilaPetur BenediktssonMorarji R. DesaiAbdol Hossein BehniaMudhaffar H. JamilSeamus O. RiainDavid HorowitzGuido CarliMikio MizutaHashem JayousiElias SarkisAhmed LahsairiPierre WernerAntonio Ortiz MenaJ. ZijlstraH. R. LakeGuillermo Sevilla

SacasaChief Festus Sam

Okotie-EbohArne SkangMohamed Shoaib

AlternateAbdul Hai AzizJulio Gonzalez del Solar

Sir Roland WilsonHubert SchmidHubert AnsiauxAdolfo LinaresOctavio Gouvea de

BulhoesU Kyaw NyunA. F. W. PlumptreH. S. Amerasinghe

Alvaro Orrego BarrosJorge Cortés Boshell

Alvaro VargasPoul Bjorn OlsenLydia PichardoAlejandro T. Ponce L.Luis Escalante ArceBulcha DemekesaDato' Ismail bin Dato'

Abdul RahmanReino RossiPierre Paul SchweitzerFranz Etzel

Hubert C. Kesselsloannis ParaskevopoulosMax Jiménez Pinto

Antonio AndréJuan Milla BermúdezThor ThorsL. K. JhaDjalaleddin AghiliAbdul Hassan ZalzalahT. K. WhitakerJacob ArnonDonato MenichellaMasamichi YamagiwaMohammad Ali RidaRaja HimadehA. A. AttigaPierre GuillJosé Hernández DelgadoS. PosthumaE. L. GreensmithJuan José Lugo Marenco

Reginald A. Clarke

Thomas LovoldM. A. Mozaffar

Votes361

1,912

2,465804

2,742328

1,413

4163,850

416

638638

2721,003

272285261283527

6716,0653,905

416527272

272261261

4,681622317582300

2,2443,019

283300305361970

3,2961,173

259

619

8041,358

Per Cantof Total

0.331.72

2.220.722.460.301.27

0.373.460.37

0.570.57

0.240.900.240.260.240.250.47

0.605.453.51

0.370.470.24

0.240.240.244.210.560.290.520.272.022.710.250.270.280.330.872.961.050.23

0.56

0.721.22

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634 THE INTER-GOVERNMENTAL ORGANIZATIONS

MEMBER

SUBSCRIPTIONS

Amount (inThousands ofU.S. Dollars)

BOARD OF GOVERNORS

GovernorAugusto Guillermo

ArangoCésar Romeo AcostaFernando BerckemeyerAndrés V. CastilloT. E. DöngesMariano Navarro Rubio

AlternateCarlos A. Velarde

VOTINGNumber of

Votes252

Abdel Magid Ahmed

G. E. StraengSunthorn Hongaladarom

Oscar Stark RivarolaEmilio FoleyEduardo Z. RomuáldezM. H. de KockJuan Antonio Ortiz

GraciaHamzah Mirghani

HamzahN. G. Lange

Sefik InanAbdel Moneim El

KaissouniJohn Selwyn Brooke

LloydC. Douglas DillonRafael Alfonzo Ravard

Boonma WongswanZiya Kayla(Vacant)

Sir Denis Rickett

George W. BallMiguel Herrera Romero

266444416

1,3581,358

361

1,358389726912

14,650

35,418366

111,303

POWERPer Centof Total

0.23

0.240.400.371.221.22

0.33

1.220.350.650.82

13.16

31.820.33

100.00

ANNEX II. DIRECTORS AND ALTERNATES(As of 31 December 1961)

Appointed DirectorJohn M. LeddyDavid B. PitbladoRené LarreB. K. NehruOtto Donner

Elected DirectorAndré van Campenhout (Belgium)

Mohamed Shoaib (Pakistan)

Louis Rasminsky (Canada)Gengo Suzuki (Japan)José Aragones (Spain)Ake Lundgren (Sweden)

J. M. Garland (Australia)P. Lieftinck (Netherlands)Luis Machado (Cuba)*

Juan Haus Solis (Bolivia)Jorge Mejía Palacio (Colombia)

AlternateErie Cocke, Jr.S. GoldmanJacques WaitzeneggerC. S. Krishna MoorthiH. Gorn

AlternateErnst A. Rott (Austria)

AH Akbar Khosropur (Iran)

L. Denis Hudon (Canada)Mo Myit (Burma)Sergio Siglienti (Italy)Jaakko Lassila (Finland)

A. J. J. van Vuuren (South Africa)Augustin Papic (Yugoslavia)*Lempira E. Bonilla (Honduras)

Carlos S. Brignone (Argentina)José Camacho (Colombia)

(Vacant)Omar S. Elmandjra (Morocco)*

Casting the Votes ofUnited StatesUnited KingdomFranceIndiaGermany, Fed. Rep. of

Casting the Votes ofBelgium, Austria, Turkey, Luxem-

bourgPakistan, United Arab Republic,

Iran, Sudan, Iraq, Lebanon,Ethiopia, Jordan

Canada, IrelandJapan, Burma, Ceylon, ThailandItaly, Spain, GreeceSweden, Denmark, Norway, Fin-

land, IcelandAustralia, South AfricaNetherlands, IsraelMexico, Peru, Venezuela, Costa

Rica, Guatemala, El Salvador,Honduras, Nicaragua, Panama

Argentina, Chile, Bolivia, ParaguayBrazil, Colombia, Philippines,

Ecuador, HaitiFederation of Malaya, Ghana, Af-

ghanistan, Libya

* The Board of Directors of the Corporation are composed ex officio of each Executive Director of theInternational Bank who must have been either appointed by a member of the Bank, which is also a memberof the Corporation, or elected in an election in which the votes of at least one member of the Bank, whichis also a member of the Corporation, shall have counted towards his election. The alternate to each such Ex-ecutive Director of the Bank is ex officio an Alternate Director of the Corporation.

Panama

ParaguayPeruPhilippinesSouth AfricaSpain

Sudan

SwedenThailandTurkeyUnited Arab

RepublicUnited Kingdom

United StatesVenezuela

Total

2

16194166

1,1081,108

111

1,108139476662

14,400

35,168116

*

0.020.200.171.151.15

0.12

1.150.140.490.69

14.95

36.520.12

96,303* Less than .005 per cent.

100.00

Per Centof

Total

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THE INTERNATIONAL DEVELOPMENT ASSOCIATION

ANNEX III. PRINCIPAL OFFICERS AND OFFICES(As of 31 December 1961)

PRINCIPAL OFFICERS

635

President: Eugene R. BlackExecutive Vice-President: M. M. RosenVice President: J. G. BeevorActing Director of Investments: Neil J. PatersonGeneral Counsel: R. B. J. RichardsSenior Engineer: J. David DoddChief Accounting Adviser: Charles F. Herrmeyer

Treasurer: R. W. CavanaughSecretary: M. M. MendelsDirector of Administration: W. F. HowellDirector of Information: H. N. Graves, Jr.Special Representative, New York Office: Elliot H. LeeSpecial Representative, London and Paris Offices:

James H. Darton

HEADQUARTERS AND OTHER OFFICESHEADQUARTERS

International Finance Corporation1818 H. Street, N.W.Washington 25, D.C., U.S.A.

Cable Address: CORINTFIN WASHINGTON

LONDON OFFICE

International Finance Corporation(London Office)27 Old JewryLondon E.C.2, England

NEW YORK OFFICE

International Finance Corporation(New York Office)33 Liberty StreetNew York 5, N.Y., U.S.A.

PARIS OFFICE

International Finance Corporation(Paris Office)4 Avenue D'IenaParis 16e, France

CHAPTER VIII

THE INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)

The International Development Association(IDA)1, an affiliate of the International Bankfor Reconstruction and Development (WorldBank), was established in September 1960 topromote economic development in the less de-veloped areas of the world included within itsmembership. It provides finance on terms whichare more flexible and bear less heavily on thebalance of payments of recipient countries thando conventional loans. The structure of IDAis adapted to administration by the World Bank.Although its funds are kept separate, its di-rectors, officers and staff are those of the Bank,serving ex-officio with the Association. The termsof IDA lending are much more lenient thanthose of the Bank, but IDA uses the same highstandards of project planning and executionwhen considering a credit operation.

Membership is open to all member countriesof the World Bank, and by 31 December 1961,IDA had 56 members. The following 18 mem-bers were admitted during 1961: Afghanistan

(on 2 February), Bolivia (on 21 June), Ceylon(on 27 June), Colombia (on 16 June), CostaRica (on 30 June), Ecuador (on 7 November),Ethiopia (on 11 April), Guatemala (on 27April), Haiti (on 13 June), Iceland (on 19May), Republic of Korea (on 18 May), Libya(on 1 August), Mexico (on 24 April), Nether-lands (on 30 June), Nigeria (on 14 November),Panama (on 10 February) and Peru (on 30August).

CREDIT OPERATIONSIn less than a year of lending operations,

IDA had, by 31 December 1961, extended 18development credits in 18 countries for a totalof $108.8 million. Most of these credits wentto countries in Asia and the Middle East, whichtogether accounted for $103.8 million. LatinAmerican countries received a total of $59 mil-lion in IDA development credits, all for highway

1 For information about developments prior to 1961,

see Y.U.N., 1960, pp. 641-53.