Tenth Anniversary of EDI
JANUARY marked the tenth anniversary of the Economic Development Institute (EDI), the World Bank staff college for senior officials of developing countries who are directly concerned with economic development. The EDI began as an experiment to determine whether the experience of the World Bank in dealing with problems of economic development in many countries could be used to broaden the perspective and competence of senior officials of such countries. The Institute is now a firmly established part of the World Bank’s activities. It has, since its inception, increased the number of courses it offers senior officials from one each year to as many as six in a 12 month period. As well as increasing the intensity of of its program, the Institute has diversified: it now offers courses in three languages (English, French, and Spanish), and expanding from its basic six-month general development course, it has entered the field of project evaluation. It now provides courses in industrial, agricultural, and general projects.
Multilateral Investment Guarantees
During the March 1966 quarter, Executive Directors of the Bank began discussions on possible Bank sponsorship of a scheme designed to guarantee private foreign investment in developing countries against loss from noncommercial “political” risks, thus encouraging the flow of private capital funds and know-how into developing countries. The risks covered by the scheme might include expropriation, restrictions on ability to convert and transfer principal and earnings, and war. The United States, the Federal Republic of Germany, and Japan for some years have offered protection against these risks to investments made by their own nationals; and in 1964 the UN Conference on Trade and Development asked the Bank to study ways in which this type of national scheme could be extended internationally. Coinciden-tally, the Council of the Organization for Economic Cooperation and Development was preparing a report outlining the principal features of a possible international guarantee scheme. This report has been the starting point for discussions about the proposal within the Bank.
Convention on Settlement of Investment Disputes
In another sphere, World Bank action to improve the climate for the flow of private capital continued to receive support during the quarter. This is the Bank-sponsored Convention on the Settlement of Investment Disputes between States and Nationals of Other States.1 It provides for the establishment of an international center for settlement of investment disputes, which will operate as an autonomous institution under Bank auspices and offer contracting states the facilities of both conciliation and arbitration for the settlement of disputes. The Convention will enter into force 30 days after it has been both signed and ratified by 20 governments. At the end of March, 35 Bank member countries had signed the Convention, but only 4 members had ratified it: the Central African Republic, Ivory Coast, Mauritania, and Nigeria.
New Bond Issues
During the quarter the Bank carried out three successful funding operations. In the first of these it arranged to refinance on February 1, 1966, the date on which they matured, notes totaling $22 million and DM 40 million (US$10 million) by issuing in exchange new notes totaling $16 million and DM 64 million (US$16 million) maturing on February 1, 1968 and February 1, 1971 with interest at 4 ⅞ per cent. In the second operation, on February 14, the Bank launched in Canada a new cash issue of Can $20 million of 5 ¾ per cent 25-year Canadian dollar bonds. The new issue, which will mature on March 15, 1991, was offered at 97 and accrued interest, to yield 5.98 per cent. The issue—which was oversubscribed—was the World Bank’s fifth offering of its bonds in Canada. The last issue was in February 1965. In the third funding operation for the quarter, the Bank announced on March 16 that it had arranged the sale, entirely outside the United States, of a $100 million issue of U.S. dollar bonds. The sale, at par, was made by private placement with central banks and other governmental institutions in 22 countries and with one international organization. The new bonds, known as the Two-Year Bonds of 1966, bear interest at 5 ¼ per cent payable semiannually, with the first payment due September 15, 1966. The issue, dated March 15, 1966, will mature March 15, 1968.
New Development in Loan Pattern
On March 30 the Bank announced the first loan it has made exclusively for engineering services connected with a proposed project. This was a loan of $1.7 million to finance engineering services required by the Republic of Guinea to enable that country to obtain firmly based estimates of the construction costs of a railway, port, and township which the Government proposes to build in order to develop the country’s rich bauxite deposits. These deposits, in the Boké region of northwestern Guinea, are considered among the most abundant in the world.
|Loans made during the first quarter of 1966||50.70|
|Total Bank loans made during the calendar year 1965||1,167.20|
|Credits extended during first quarter of 1966||61.60|
|Total IDA credits extended during the calendar year 1965||196.20|
|Country||Type of Project||Amount|
|Ethiopia||Pulp and Paper||$1,900,000|
|Investments announced during the first quarter of 1966||$7,834,029|
|Total investments announced during the calendar year 1965||$23,148,079|
For a discussion of this Convention, see Shirley Boskey and Piero Sella, "Settling Investment Disputes," Finance and Development, Vol. II, No. 3 (September 1965), pp. 129-34.