the international finance...
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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.
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
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
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
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.