Settlement of Investment Disputes
An outstanding event of the quarter was the completion by the Bank’s Executive Directors and submission to member governments of the text of a Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
The Convention, which will enter into force 30 days after it has been signed and ratified by 20 governments, provides for the establishment of an International Center for Settlement of Investment Disputes as an autonomous international institution under the auspices of the Bank. The Center will make available facilities to which contracting States and foreign investors who are nationals of other contracting States have access on a voluntary basis for the settlement of investment disputes between them in accordance with rules laid down in the Convention. The method of settlement selected might be conciliation or arbitration, or conciliation followed by arbitration in case the conciliation effort should fail. The initiative for such proceedings could come either from a State or an investor. The Center will not itself act as conciliator or arbitrator but will maintain panels of specially qualified persons from which conciliators and arbitrators can be selected if the parties to the dispute so desire, and will provide necessary facilities for conduct of the proceedings.1
Bank Issues Bonds in Three Countries
During the quarter under review, the Bank carried out a large-scale borrowing program through public offerings of $287.5 million equivalent of long-term bonds in Canada, the Federal Republic of Germany, and the United States. In January 1965, after a lapse of three years, the Bank entered the U.S. market with a new issue of $200 million 4½ per cent 25-year bonds, due February 1, 1990, at 100⅜ per cent to yield 4.475 per cent to maturity. A month later, the Bank marketed a new issue of $25 million 5¼ per cent 25-year Canadian Dollar Bonds. This issue, the Bank’s first in Canada in 10 years, was offered at 99½ per cent to yield about 5.28 per cent. In March, the Bank offered in Germany a new issue of DM 250 million (U.S. equivalent $62.5 million) of 5½ per cent 20-year Deutsche Mark Bonds. This was the second public offering of Bank bonds in Germany, the first being in 1959.
In March, the Bank organized three missions to appraise the economies of Peru, Turkey, and Venezuela. Some 45 experts were involved in these missions. In addition, the Bank agreed to help finance a study of the Kunduz-Khana-bad River Basin in northern Afghanistan to select a suitable area for an integrated agricultural development project. The Bank also agreed to act as Executing Agency for the UN Special Fund to carry out feasibility studies necessary for the development of the irrigation and power facilities of the Yaque del Norte and the Yaque del Sur river basins in the Dominican Republic.
The Economic Development Institute of the Bank began two new courses during the quarter under review: a four-month development course in the French language with 23 officials from 19 countries, and a three-month course on industrial project evaluation with 26 participants from 20 countries.
Mr. Simon Aldewereld was appointed a Vice-President of the Bank and IDA. He continues as Director of the Projects Department as well.
World Bank Group’s Commitment in the First Quarter of 1965
During the quarter under review the Bank Group committed $222 million in loans, credits, and investments for economic development. The total consisted of $172.4 million in Bank loans, $45.2 million in IDA credits, and $4.4 million in IFC investments.
|Country||Type of Project||Amount|
|Ivory Coast||Development Finance Company||204,081|
An article describing the background of this important development and the steps by which it was completed will appear in a forthcoming issue of Finance and Development.