MULTILATERAL DEVELOPMENT BANKS: THEIR ROLE IN LDC FINANCING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000303670001-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: December 22, 2009
• Sequence Number: 1
• Publication Date: January 3, 1985
• Content Type: REPORT

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
3 January 1985
Multilateral Development Banks:
Their Role in LDC Financing
MDBs.
341
Sumnary
Multilateral development banks (MDBs) -- the World Bank and
the Inter-American, African, and Asian Development Banks -- play
an important secondary role in LDC financing, holding about 15
percent of total LDC debt. The distribution of these loans
varies widely among individual countries and regions. The
regional MDBs lend to countries that are in the same region as
the bank, while the World Bank and its affiliates extend loans on
a global basis. To date the largest individual country borrowers
from the MDBs on a cumulative basis have been Brazil, Colombia,
India, Indonesia, Mexico, the Philippines, South Korea, Turkey,
and Yugoslavia. Low income countries in Africa and Asia are most
dependent on these loans, with one-third of their debt held by
the mid-1970s.
MDB loans favor specific sectors of the Third World
economy. Agriculture continues to be a major area of importance
because of the promotion of food self-sufficiency. Social
programs and industrial projects are also major targets for MDB
funds, while the energy sector has attracted more funds since
Branch o
information herein is updated to 31 December 1984. Comments may
be directed to Financial Issues
Financial Issues Branch, Office of Global issues. The
This memorandum was prepared by
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Lending from official sources -- both governments and MDBs
is playing a greater role in the financial rescue packages
that are being assembled for troubled debtors. Commercial banks
recently have stressed the need for greater official financing
for LDCs such as Argentina and the Philippines because the banks
are unwilling to be the only provider of funds. In addition, the
IMF has requested specific commitments of official credits prior
to approval of Fund assistance programs.
Nonetheless, we doubt that MDBs will replace commercial
banks as a major source of funds for the more developed LDCs.
Western industrial governments are unwilling to substantially
increase contributions, and there are sound arguments against
substantially increased institutional borrowing on international
capital markets. MDBs, however, will remain a key source of
funds for the poorer LDCs. Increased MDB links with private
creditors would be beneficial to all parties, particularly as a
complement to the IMF's involvement in short-term economic
adjustment.
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MULTILATERAL DEVELOPMENT BANKS:
THEIR ROLE IN LDC FINANCING
History of Multilateral Development Banks
Multilateral development banks (MDBs) had their beginning
after World War II with the formation of the International Bank
for Reconstruction and Development (IBRD) -- the World Bank -- as
part of the Bretton Woods agreement on international monetary
reform. The purpose of the World Bank was, and continues to be,
to promote the economic and social development of less developed
countries (LDCs).
Since its creation in 1945, the IBRD has undergone
substantial growth and evolution, expanding from a single
institution to a three-part lending operation. The International
Finance Corporation (IFC) -- created in 1956 -- attempts to
promote and support private enterprise in the Third World by
bringing together foreign and domestic investment capital for
development projects. The other affiliate, the International
Development Association (IDA), was established in 1960 to provide
concessional lending to the poorest LDCs. (Table 1)
Besides the World Bank group, three other major regional"
development banks have been created. The Inter-American
Development Bank (IADB) was formed in 1959 in response to a plea
from Latin American nations for funds to increase their political
and economic cooperation. The United States took the lead and
became the major contributor to the bank. US motives for
contributing to the IADB, however, were not solely humanitarian
in nature; financial journals suggest that the Eisenhower
administration chose to support the IADB in order to encourage
Latin American nations to manage their countries in a way that
was consistent with US policy for the region.
Unlike the IADB, which accepts contributions from countries
outside the region, the African Development Bank (AFDB) was
formed in 1964 by African nations who wanted to control the
financing of their economic development. Although the AFDB
initially limited its members to African nations, non-regional
developed countries were permitte~ to join in 1967 in order to
fund the bank's new "soft " 1Pn g facility, the African
Development Fund (AFDF).
1 "Soft window" facilities are designed for lending to the poorest LIEs,
which are unable to meet the terms of general MOB loans.
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Table 1
Major Multilateral Development Banks
World Bank (IBRD)
International Finance
Corporation (IFC)
International Develop-
ment Association (IDA)
Inter-American Development
Bank (IADB)
African Development
Bank (AFDB)
Asian Development
Bank (ADB)
Head- Year
quarters Est.
Washington 1945
Washington 1956
Washington 1960
Washington 1959
Abidjan, 1964
Ivory Coast
Manila, 1.965
Philippines
No.of
Members
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A third major regional development bank, the Asian
Development Bank (ADB), was created in 1965. Asian countries
relied heavily on non-regional capital to establish the ADB, with
the United States and Japan contributing the largest sums. The
ADB also established the Asian Development Fund (ADF) in order to
provide concessional funds to the region's poorest members.
Operations of MDBs
MDBs operate much like commercial banks. A board of
directors approves individual bank loans while the
representatives of member countries vote on policy matters. All
MDBs are funded primarily by members' subscriptions and by
borrowing on international capital markets. Since MDBs attempt
to promote long-term development projects in the Third World,
however, their lending terms are more concessional than those of
commercial banks.
Structural Organization
MDBs, like many international organizations, were
established by the efforts of various member nations. The major
contributors to MDBs are Western industrial nations, with the
remaining contributions coming from regional member countries.
In all cases, the amount of capital a country contributes to an
MDB determines that country's voting power. A country's voting
power, in turn, determines its representation on an MDB's board
of directors. This board oversees bank operations and elects the
bank president in addition to approving loans. Each MDB also has
a second governing body, the board of governors, which is
comprised of one delegate from each member country. The board of
governors meets annually to elect the board of directors and vote
on policy matters.
The distribution of voting power varies among individual
MDBs. The World Bank's voting is controlled by Western
industrial nations, which have about 59 percent of the total
votes as opposed to 41 percent for the LDCs. The United States
is by far the most influential IBRD member with more than 19
percent of the votes. These same patterns exist in the IDA and
IFC. Among the regional development banks, the regional members
control the majority of the votes in each case (ADB- 64 percent,
AFDB- 65 percent, and IADB- 93 percent). The United States is a
major shareholder in each of these MDBs. (Table 2)
Funding
In order to finance their lending for development projects,
MDBs obtain funds from three sources (Table 3):
o Member countries provide capital subscriptions, known as
general capital increases (GCIs). A GCI, which is
authorized periodically by each MDB, is composed of two
parts. One portion of a member country's subscribed
capital -- known as "paid-in" capital -- is distributed
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Table 2
MDBs: Member Countries' Voting Power, 1983
IBRD Percent of Total IDA
Percent of Total
United States
19.20 United Sta
tes
19.54
United Kingdom
6. t5 West Germa
ny
7.14
West Germany
5.97 Japan
7.06
Japan
5.94 United Kin
gdom
7.01
France
5.03 France
3.74
China
4.09 Canada
3.45
India
4.01 India
3.27
Italy
3.47 Italy
2.58
Canada
3.22 Sweden
2.40
Netherlands
2.65 Saudi Arab
ia
2.22
Australia
2.24 Netherlands
2.00
Belgium
2.19 China
1.90
Saudi Arabia
1.98 Brazil
1.70
Brazil
1.89 Argentina
1.69
Indonesia
1.38 Australia
1.44
Venezuela
1.35 Belgium
1.21
Sweden
1.31 Spain
1.20
Others
27.93 Others
30.45
IFC Percent of Total IADB
Percent of Total
United States
25.53 United Stat
es
35.00
United Kingdom
R.63 Brazil
12.12
West Germany
5.81 Argentina
10.59
France
5.17 Mexico
7.80
Japan
4.48 Venezuela
5.68
Canada
3.68 Canada
4.58
India
3.48 Chile
3.33
Italy
3.36 Colombia
3.33
Netherlands
2.56 Peru
1.43
Belgium
2.43 Uruguay
1.31
Australia
2.16 Japan
1.13
Brazil
1.81 United King
dom
1.01
Argentina
1.75 West German
y
0.91
Saudi Arabia
1 .65 France
0.89
Indonesia
1.32 Italy
0.89
Venezuela
1..28 Spain
0.89
Sweden
1.25 Bolivia
0.86
Others
25.65 Others
36.66
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Table 2 (cont.)
MDBs: Member Countries' Voting Power, 1983
AFDB Percent of Total
Percent of Total
Nigeria
8.21 United Sta
tes
17.97
United States
5.86 Japan
8.99
Libya
5.09 India
8.59
Japan
4.85 Australia
7.89
Egypt
4.60 Canada
7.18
West Germany
3.67 South Kore
a
6.93
Algeria
3.58 Indonesia
3.86
Canada
3.36 Philippine
s
3.51
France
3.36 West Germa
ny
3.16
Zaire
3.32 United Kin
gdom
3.07
Morocco
3.03 New Zealan
d
2.42
Zimbabwe
2.77 Malaysia
2.15
Zambia
2.62 Pakistan
1.81
Ivory Coast
2.57 France
1.51
Ghana
2.49 Italy
1.30
Italy
2.21 Thailand
1.30
Ethiopia
1.75 China
1.13
Others
36.66 Others
17.23
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Table 3 1
MDB RESOURCES - 1983
(Million US $)
Paid-In
Capital
-------
Borrowings Reserves,
Accumulated
Net Income
---------- -----------
Total
Primary
Resources
---------
Callable
Capital
--------
IBRD
4,968
45,015 4,342
54,325
51,042
IDA2
n.a.
n.a. n.a.
30,452
n.a.
IFC
544
583 263
1,390
n.a.
IADB
1,250
2,476 1,487
5,213
12,355
AFDB
1,321
1,224 145
2,690
3,964
1,658
3,418 1,133
6,209
9,852
-----------------------------
1 Data for the IBRD, IDA, and IFC are for fiscal year 1984 (1 July 1983 - 30 June
1984).
2 The IDA obtains its resources primarily from subscriptions, supplementary
resources, contributions, and transfers from the IBRD.
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to the MDB. The remainder of the subscription -- or
"callable" capital -- is held on reserve by the member
country and can be drawn upon by the MDB at any time
should the MDB encounter liquidity problems. To date,
no MDB has ever requested the backing of callable
capital.
o The MDBs borrow on international capital markets by
selling bonds to governments and private investors.
Because large amounts of callable capital back :VIDB bond
issues and debtor governments traditionally have agreed
not to default on MDB loans, MDB bond issues receive
extremely high ratings from investors (usually AAA).
MDBs, therefore, are able to acquire a large portion of
their resources in the bond market.
o The banks also retain earnings from MDB loan portfolios
and other investments. Fees and interest earned on
loans to member countries and interest realized on
reserve holdings are included here.
Lending
MDB member countries receive funds' primarily in the form of
loans tied to specific development projects. Prior to approval
of a loan, a study is undertaken by the MDB to determine the
feasibility of the project and the ability of the borrower to
repay the loan. When a member country receives a project loan,
it is usually issued in a hard currency -- such as US dollars,
Japanese yen, or British pounds.
Another type of MDB lending is cofinancing, which involves
the joint financing of a development project by an MDB and other
sources outside the borrowing country. The three main categories
of cofinancing partners are: official sources, which include
governments, their agencies, and multilateral financial
institutions; export credit agencies; and private financial
institutions, including commercial banks, insurance companies,
and pension funds. Cofinancing has not been used to a great
extent in recent years because of the difficult market conditions
affecting the availability of private-sourced credits. The
amount of cofinancing in the past few years has been about $6-8
billion, most of it being provided through the World Bank. Over
the past decade, the lower income LDCs have received the greater
number of cofinancing loans, but the high income countries have
obtained a larger amount of funds. Most of the cofinancing has
gone toward projects in the energy, industry, transportation, and
agriculture sectors.
An additional type of MDB loan, which is unique to the World
Bank, is the structural adjustment loan (SAL). Structural
adjustment lending was introduced in 1980 as the IBRD's way to
help developing countries that were experiencing serious balance-
of-payments problems following the 1979 oil price hikes. The
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basic objectives of an SAL are:
o To support a program of specific policy changes and
institutional reforms to contribute to a sustainable
balance-of-payments position over the medium and long
term.
o To provide foreign exchange to assist a country in
meeting the transitional costs of needed structural
changes.
o To act as a catalyst for lending by other creditors to
help ease the balance-of-payments situation.
The SAL -- which is similar to an IMF Extended Fund Facility
arrangement -- is monitored by the World Bank on a regular basis
over the life of the loan, usually one year. If the time
required to accomplish needed reforms extends over several years,
a series of SALs may be provided. SALs usually consist of two
tranches, one of which is disbursed on signing of the agreement
and the other upon satisfactory completion of IBRD review.
Since the inception of the SAL program, the IBRD has
approved 27 SALs in 16 countries for a total of over $4
Killion. Kenya, Turkey, and Bolivia were the first recipients of
SALs, during FY1980. The number of SALs approved by the IBRD
jumped to seven in FY1981, but the total has remained in the 5-7
range through FY1984.
The IFC differs from other MDBs in that it also makes equity
investments in private companies in its member countries. These
investments are always undertaken with others; local investors
and financial institutions are particularly important, providing
more than half the financing for ventures assisted by the IFC.
Even though it holds equity in companies, the IFC rarely gets
involved in the management of the firms. The IFC maintains a
continuing interest, however, through field visits and periodic
consultations with management. The IFC's investment portfolio
changes over time as it sells some of its shares to other
investors, preferably in the country where the company is
Because MDBs attempt to promote long-term economic and
social development in LDCs, their lending terms differ from those
extended by commercial banks on the international capital
markets. (Table 4) Commercial banks generally provide short-
and medium-term financing at market interest rates, while MDBs
extend long-term credits at concessional or below-market rates.
Most commercial bank credits are based on floating interest rates
such as LIBOR -- the London Interbank Offer Rate -- but MDBs
traditionally have extended loans at fixed interest rates over
the life of the loan. The IBRD and IADB, however, have changed
their lending policies somewhat in the past year. These MDBs
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Table 4
COMPARATIVE MDB LENDING TERMS
As of 1 July 1984
Current Lending Rate
(Percent)
Type of Rate
Commitment Fee
(Percent)
Other Service Charge
(Percent)
Maturity (Years)
Grace Period (Years)
--------------------
1 Average 1984 loan terms for LDC borrowers.
Commercia'
ADB Banks
1.00 0.75 0.25-0.50
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still fix the interest rate on their loans, but the rate is
adjusted periodically based on the institutions' cost of funds.
The terms on loans from the IDA and the other "soft window"
facilities are considerably easier than those of standard MDB
project loans. For example, the IDA charges no interest on its
loans and offers a 50-year maturity, including 10 years of
grace. These soft loans are directed to the poorest LDCs; the
IDA only lends to countries with an annual per capita GNP of less
than $806 (in 1982 dollars). Fif LDCs currently are eligible
under this criterion.
The Importance of MDBs
Many LDCs -- particularly poorer countries in Sub-Saharan
Africa and South Asia -- are unable to obtain commercial bank
credits because of their generally low credit ratings. MDBs,
along with Western governments, provide the bulk of financing to
these countries. About one-third of the some $65 billion in
medium- and long-term debt held by low income LDCs in Africa and
Asia is owed to multilateral creditors. This is in contrast to a
figure of about 15 percent for all LDCs.
In recent years, MDB lending has played a diverse role. In
addition to providing funds to bolster the financial position-s of
specific countries, MDBs also have promoted the growth of certain
sectors of the Third World economy. Whether distributing loans
on a regional or sectoral basis, certain countries and sectors
have attracted more emphasis than others. (Table 5)
Regional Distribution
Although all LDC debtors seek MDB funds, the distribution of
MDB loans varies widely among individual countries and regions.
The regional MDBs -- IADB, ADB, AFDB -- by definition lend only
to countries that are in the same region as the bank. The World
Bank, IDA, and IFC. however. extend loans on a global basis.
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South Korea, Turkey, Colombia, the Philippines, and Yugoslavia,
have the largest cumulative borrowing totals from the IBRD.
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The IDA's lending has been directed primarily to countries
in South Asia and Sub-Saharan Africa. India, China, and
Bangladesh were the largest individual IDA recipients in fiscal
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World Bank lending over the past five years has increased to
all regions, with the most funds being directed toward Latin
America. Close behind in terms of lending volume are South Asia,
East Asia, and North Africa/Middle East. East and West Africa
have obtained an increasing amount of IBRD credits, but they
still lag far behind the totals of the other regions. During FY
1484, the largest individual borrowers from the IBRD were India,
Brazil, and Indonesia. These three countries, along with Mexico,
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Tahle 5
MDB LENDING
1980
1981
1982
1983
I BRD
Number of Loans
140
150
136
129
Commitments (Mil US$)
8,809
10,330
11,138
11,949
Disbursements (Mil US$)
5,063
6,326
6,817
8,580
IDA
Number of Loans
106
97
107
106
Commitments (Mil US$)
3,482
2,686
3,341
3,575
Disbursements (Mil US$)
1,878
2,067
2,596
2,524
IFC
Number of Loans
56
65
58
62
Commitments (Mil US$)
811
612
846
696
Disbursements (Mil US$)
587
530
374
381
IADB
Number of Loans
88
81
79
74
Commitments (Mil US$)
2,309
2,493
2,744
3,045
Disbursements (Mil US$)
1,432
1,542
1,663
1,730
AFDB
Number of Loans
.63
72
77
79
Commitments (Mil US$)
571
636
766
930
Disbursements (Mil US$)
220
200
280
353
ADB
Number of Loans
58
54
56
53
Commitments (Mil US$)
1,436
1,678
1,731
1,893
Disbursements (Mil US$)
579
667
795
937
Data for the IBRD, IDA, and IFC are for FY1981-FY1984.
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year 1984. Moreover, India is by far the largest cumulative IDA
borrower, with Bangladesh and Pakistan a distant second and
third, respectively.
The regional distribution of IFC loan commitments and equity
investments is weighted more heavily toward the more developed
LDCs. Latin America (especially Brazil, Mexico, and Argentina),
Asia (India, Indonesia, South Korea, Pakistan, and Thailand), and
Europe and the Middle East (Yugoslavia, Turkey, and Egypt) have
the largest volume of cumulative IFC assistance. In recent
years, however, the IFC has attempted to direct more of its
lending to Africa in order to encourage private-sector
development in a region that has been far behind other LDCs in
the area of private investment.
Sectoral Distribution
MDBs favor certain countries when distributing funds, but
they also favor specific sectors of the Third World economy.
o Agriculture traditionally has been a major area of
concentration for MDB funds because of the historical
importance development specialists have attached to
promoting food self-sufficiency in developing
countries. About one-third of all MDB lending in 1980
went for agriculture projects. Among the MDBs exami-ned
in this paper, only the.IFC, which primarily supports
industrial development, fails to allocate a substantial
portion of its funds to agriculture.
o Social programs -- which include projects for education,
population, health, and nutrition -- also account for a
large part of MDB lending. These sectors are viewed by
MDBs as essential to development for LDCs.
o The energy sector has taken on greater importance since
the mid-1970s. MDBs have boosted their lending for
energy projects to promote development of domestic
energy sources as a substitute for high-cost imported
energy.
o The IFC devotes most of its lending to projects
involving light and heavy industry. The other MDBs also
have directed more of their lending to the manufacturing
sector in an attempt to boost LDC exports and import
substitution.
Other sectors, which have varying degrees of importance among MDB
lending, include transportation, communication, and tourism.
(Table 6)
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Table 6
MDB LENDING BY SECTORS
(Percent)
1975 1980 1983
IBRD
Agriculture 28 22 21
Industry/Development Fin. 28 19 23
Transportation 19 16 13
Social Programs 8 14 11
Energy 11 25 22
Non-Project 5 4 10
Tourism 1 0 0
IDA
Agriculture 40 46 39
Industry/Development Fin. 17 6 7
Transportation 11 6 16
Social Programs 10 12 21
Energy 2 24 9
Non-Project 20 6 8
IFC
Agriculture 5 4 7
Light Industry 19 14 2
Heavy Industry 44 44 52
Fuel and Minerals 14 25 29
Service Industries 0 4 3
Financial Institutions .18 9 7
IADB
Agriculture 24 27 16
Industry/Development Fin. 14 11 25
Transportation/Communication 22 20 6
Social Programs 16 16 16
Energy 22 23 32
Non-Project 2 2 2
Other 0 1 3
AFDB
Agriculture 21 27 23
Transportation 28 26 24
Utilities 32 24 33
Industry/Development Fin. 8 16 10
Social Programs 11 7 10
ADB
Agriculture 26
Industry/Development Fin. 8
Transportation/Communication 19
Social Programs 39
Energy 0
Other 8
69 29
7 19
3 1
13 29
7 22
0 0
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Lending to Debt-Troubled LDCs
Lending from official sources -- governments as well as MDBs
-- is playing a greater role in the financial rescue packages
that are being assembled for troubled debtors. Commercial banks
recently have stressed the importance of greater official
financing for LDCs such as Argentina and the Philippines because
the banks are unwilling to be the only provider of funds. In
addition, the IMF has requested specific commitments of official
credits prior to approval of Fund assistance programs. The
emphasis on increased involvement by all creditors in LDC
financial packages has highlighted the need for continued MDB
lending.
The Outlook for MDBs
Despite the slow but steady annual growth in MDB
commitments, the participants of the June 1984 London Economic
Summit -- the Western industrial nations -- called for an
"expanding role" for the World Bank in the Third World debt
crisis. The Summit communiques did not specify the participants'
expectations for expansion of the World Bank's role, but new
provisions could include: supplementary technical assistance,
increased lending, or more concessional lending terms. If the
World Bank and other MDBs are to ease the plight of LDCs by
providing them with additional funds, however, the MDBs must
obtain additional resources.
Although the potential for generating supplemental funds
exists, problems will arise as MDBs attempt to expand their
capital bases. MDBs rely heavily on GCIs to finance their
lending during the period of time for which funds were
allocated. If an MDB decided to increase present lending, then
it would have less funds available for subsequent lending under
the current GCI.. For example, the World Bank is not due for
another GCI until FY 1986. If the Bank were to substantially
increase flows to LDCs in 1985, less money would be available to
fund projects currently being planned for FY1986.
The GCI scheduled for FY1986 is not assured, however.
Confrontations between member countries and the IBRD could arise
over the total amount of the proposed GCI and over changes in
voting power because of reductions or augmentations in a
country's subscribed capital. In addition, many member countries
face budgetary constraints that could affect the timing and the
amount of any proposed new commitment. Member nations also could
question the World Bank's request for additional funding because
the IBRD maintains a growing reserve of undisbursed funds and
because retained earnings nearly equal yearly lending. The World
Bank possesses the greatest retained earnings-to-disbursements
ratio of any MDB; in some years retained ea rnin s have equalled
70 percent of all IBRD lending.
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Because of the complexities of obtaining member approval for
GCI and the time lag involved in receiving these funds, MDBs may
have to borrow funds on the international capital markets to
raise capital. Most financial observers believe the current
outlook for increased MDB borrowing in capital markets is
favorable. Even though most MDBs have stated in their program
projections that they intend to increase borrowing, they cannot
do so indefinitely because their capital-to-borrowing ratios
would fall, resulting in lower bond ratings. This might cause
investors to withdraw funds from the MDB bond market.
A more feasible method of providing additional support to
debt troubled LDCs is through increased use of cofinancing.
Although cofinancing has not proved as effective as many MDBs had
anticipated, the World Bank for one is proposing a new scheme to
restructure its cofinancing program. The plan involves
channeling initial loan repayments to the private investor with
the World Bank being repaid later.
Although this new approach would appear to enhance the
attractiveness of cofinancing, problems exist that could hinder
its growth:
o First, LDCs may decide not to-engage in cofinancing.
.Since many of the debtors receive IMF assistance, they
must comply with IMF-supported austerity measures and
economic performance targets. A sudden inflow of
cofinancing funds could cause debtors to surpass money
supply targets. For example, press reports have stated
that Brazil probably will reject a $2 billion
cofinancing program for this reason.
o Second, there could be a lack of support from private
creditors. Although the World Bank's new scheme seems
to provide favorable terms to creditors engaging in
cofinancing, there would be no official guarantee of
repayment under the new program. Actually, private
creditors receive no substantial benefits from
cofinancing over direct investment in LDC projects.
Nonetheless, we expect that MDB lending will continue to
play an important, but secondary role in LDC financing. MDBs
will remain major sources of long-term loans especially for
development projects in poorer LDCs who continue to need to
borrow at concessional rates.
MDBs will not replace commercial banks as a major source of
funds for the more developed LDCs, however. Despite calls for a
greater role for the World Bank in the LDC debt situation, we
believe the unwillingness of Western industrial governments to
substantially increase contributions will restrict the power and
influence of MDBs, including the World Bank, keeping the burden
of LDC financing on commercial banks.
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Even so, discussions among financial analysts continue over
what role the IBRD, in particular, should play in LDC adjustment
and the Bank is examining additional ways in which it can assist
LDCs within the constraints of limited funds. For example, the
IBRD has held discussions and consultations with official export
credit agencies in OECD countries on ways to boost export credits
to LDCs through increased cofinancing. The IBRD also has
developed a proposal for a multilateral investment guarantee
agency -- independent of the IBRD -- that would encourage
investment in LDCs by issuing guarantees to investors. Overall,
we believe greater MDB links with private creditors would be
beneficial, particularly as a complement to the IMF's involvement
in short-term economic adjustment. The MDBs and the IMF,
however, will need to better coordinate their activities -- with
clear lines of responsibility drawn,-- in order to maximize the
benefits for developing countries.
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ANNEX: MDB Lending to Individual Countries
This annex contains tables that show individual country
borrowing from the six MDBs discussed in this paper -- the World
Bank (IBRD), the International Development Association (IDA), the
International Finance Corporation (IFC), the Inter-American
Development Bank (IADB), the African Development Bank (AFDB), and
the Asian Development Bank (ADB). The data cover the most recent
year's loans along with the cumulative borrowing totals since the
inception of the individual MDBs.
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MDB Lending to Individual Countries
WORLD BANK (IBRD)
(Million US $)
FY1984
Total
Cumulative FY1984 Cumulative
(FY1947-84) Total (FY1947-84)
Latin America
Argentina
0
Africa
1,918 Botswana
45
222
Bahamas
0
23 Burundi
0
5
Barbados
14
60 Cameroon
22
560
Belize
0
5 Congo
0
112
Bolivia
0
299 Ethiopia
0
109
Brazil
1,604
9,942 Gabon
0
69
Chile
0
605 Ghana
0
207
Colombia
464
4,145 Guinea
0
75
Costa Rica
0
407 Ivory Coast
251
1,339
Dominican Rep.
4
296 Kenya
145
1
167
Ecuador
0
694 Liberia
0
,
156
El Salvador
0
216 Madagascar
0
33
Guatemala
50
346 Malawi
18
93
Guyana
0
80 Mali
0
2
Haiti
0
3 Mauritania
0
126
Honduras
20
504 Mauritius
60
189
Jamaica
45
642 Nigeria
438
2
574
Mexico
576
7,316 Senegal
0
,
165
Nicaragua
0
234 Sierra Leone
0
19
Panama
74
545 South Africa
0
242
Paraguay
30
458 Sudan
0
166
Peru
1.23
1,667 Swaziland
6
67
Trinidad/Tobago
0
125 Tanzania
0
318
Uruguay
0
456 Togo
0
20
Venezuela
0
383 Uganda
0
8
Regional It
0
43 Upper Volta
0
2
Zaire
0
220
East Asia
Zambia
75
679
Australia
0
418 Zimbabwe
96
477
China
616
1,179 Regional
0
251
Fiji
0
84
Indonesia
Japan
1,033
0
7,018 South Asia
863 Bangladesh
0
46
Korea, South
769
5,249 Burma
0
33
Malaysia
70
1,680 India
1,721
7
275
New Zealand
0
127 Pakistan
132
,
1
229
Papua New Guinea 49 194 Sri Lanka
12
,
149
Philippines 183 4,062
Singapore 0 181
Taiwan 0 329
Thailand 153 3,466
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MDB Lending to Individual Countries
IBRD (continued)
(Million US $)
FY1984 Cumulative
Total (FY1947-84)
Europe/Middle
Algeria
East/N.Africa
418
1,619
Austria
0
106
Belgium
0
76
Cyprus
44
240
Denmark
0
85
Egypt
458
2,487
Finland
0
317
France
0
250
Greece
0
491
Hungary
239
478
Iceland
0
47
Iran
0
1,211
Iraq
0
156
Ireland
0
153
Israel
0
285
Italy
0
400
Jordan
130
351
Lebanon
0
117
Luxembourg
0
12
Malta
0
8
Morocco
966
2,510
Netherlands
0
244
Norway
0
145
Oman
15
77
Portugal
73
1,016
Romania
0
2,184
Spain
0
479
Syria
30
536
Tunisia
135
1,347
Turkey
794
5,241
Yugoslavia
451
4,233
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Latin America
Argentina
Barbados
Bolivia
Brazil
Chile
Colombia
Costa Rica
FINANCE CORPORATION (IFC)
(Million US$)
FY1984 Cumulative
Total (FY1956-84)
Dominican Rep.
Ecuador
El Salvador
Guatemala
Guyana
Haiti
Honduras
Jamaica
Mexico
Nicaragua
Panama
Paraguay
Peru
Trinidad/Tobago
Uruguay
Venezuela
Regional
South Asia
Afghanistan
Bangladesh
India
Nepal
Pakistan
Sri Lanka
Europe/Middle
Cyprus
Egypt
Finland
Greece
Iran
Israel
Italy
Jordan
Lebanon
Morocco
Oman
Portugal
Spain
Tunisia
Turkey
Yemen AR
Yugoslavia
INTERNATIONAL
FY1984 Cumulative
Total (FY1956-84)
MDB Lending to Individual Countries
42.7
0.3
0
61.2
0
6.8
0
0
0.1
0
0
0
0
0
0
25.2
0
0
0.3
9.2
0.7
0
0
43.7
3.0
27.4
0.1
East/N.Africa
0
8.0
0
0
0
0
0
0.7
0
0
0
14.5
0
1.0
150.0
0
64.7
Africa
220.0 Botswana
0.3 Burundi
9.3 Cameroon
1044.3 Congo
56.4 Ethiopia
126.4 Gambia
6.7 Ghana
18.9 Guinea'
28.0 Ivory Coast
1.1 Kenya
18.2 Lesotho
2.0 Liberia
1.5 Madagascar
10.5 Malawi
10.4 Mali
755.5 Mauritania
9.5 Mauritius
7.8 Niger
13.9 Nigeria
65.5 Rwanda
3.1 Senegal
23.5 Sierra Leone
32.1 Somalia
10.0 Sudan
Swaziland
0.3 Tanzania
2.6 Uganda
267.1 Upper Volta
1.1.4 Zaire
191.9 Zambia
35.7 Zimbabwe
Regional
5.9 East Asia
196.4 Australia
3.1 Fiji
67.1 Indonesia
42.5 Korea, South
10.5 Malaysia
1.0 Philippines
94.9 Taiwan
9.1 Thailand
99.1 Regional
2.0
25.8
20.7
22.8
389.3
7.0
421.7
0
0
0
1.5
0
3.0
60.0
0
1.3
47.2
0
0.2
0
0
0
0
0
0
4.9
0.3
3.2
0
0
0
0
3.9
2.9
0
0.6
5.8
2.3
0
0.4
5.6
15.3
5.2
15.8
3.0
60.0
14.8
12.3
116.3
0.3
0.7
15.2
25.8
2.9
20.0
2.4
2.1
27.1
1.1
36.2
2.1
0.4
33.0
8.5
11.8
17.1
0.5
5.7
91.4
40.3
0.7
0
0
7.1
34.6
1.0
0
0
57.7
1.1
1.0
6.0
169.3
171.7
9.7
159.7
9.8
226.7
1.1
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MDB Lending to Individual Countries
INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)
FY1984
Total
(Million US $)
Cumulative FY1984 Cumulative
(FYi961-84) Total (FY1961-84)
Latin America
Africa
Bolivia
0
105 Benin
35 209
Chile
0
19 Botswana
0 16
Colombia
0
20 Burundi
5 183
Costa Rica
0
6 Cameroon
0 253
Dominica
0
5 Cape Verde
0 7
Dominican Rep.
0
22 C.A.R.
0 79
Ecuador
0
37 Chad
0 79
El Salvador
0
26 Comoros
8 33
Guyana
0
39 Congo
0 75
Haiti
19
224 Djibouti
6 15
Honduras
0
83 Eq.Guinea
6 10
Nicaragua
0
60 Ethiopia
105 605
Paraguay
0
46 Gambia
21 56
St.Vincent
5
5 Ghana
125 406
Regional
0
14 Guinea
47 202
South Asia
Guinea-Bissau
8 53
Afghanistan
0
230 Ivory Coast
0 8
Bangladesh
393
2,940 Kenya
65 697
Bhutan
9
9 Lesotho
15 85
Burma
55
665 Liberia
18 107
India
1,001
12,530 Madagascar
31 426
Maldives
0
8 Malawi
83 409
Nepal
149
505 Mali
71 319
Pakistan
175
2,021 Mauritania
8 87
Sri Lanka
55
710 Mauritius
0 20
Niger
12 226
East Asia
Nigeria
0 36
China
424 734 Rwanda
9 218
Indonesia
0 932 Senegal
62 349
Korea, South
0 111 Sierra Leone
22 111
L
aos 0 53 Somalia
32 227
Papua New Guinea 0 113 Sudan
91 873
Philippines
0 122 Swaziland
0 8
Solomon Islands
4 10 Tanzania
35 788
Taiwan
0 15 Togo
0 197
Thailand
0 125 Uganda
123 490
Vanuatu
2 2 Upper Volta
7 254
Vietnam
0 60 Zaire
67 562
Western Samoa
0 14 Zambia
22 131
Zimbabwe
0 54
Europe/Middle East/N.Africa Regional
75 92
Egypt
981
Jordan
85
Morocco
51
Syria
47
Tunisia
0 75
Turkey
0 179
Yemen AR
56 395
Yemen PDR
17 171
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MDB Lending to Individual Countries
INTER-AMERICAN DEVELOPMENT BANK (IADB)
1983
Total
(Million US $)
Cumulative
(1961-83)
Argentina
80
2,717
Bahamas
0
5
Barbados
5
66
Bolivia
59
916
Brazil
441
4,476
Chile
548
1,552
Colombia
406
2,141
Costa Rica
42
686
Dominican Republic
96
901
Ecuador
83
1,126
El Salvador
15
609
Guatemala
168
793
Guyana
0
118
Haiti
19
226
Honduras
130
670
Jamaica
120
406
Mexico
286
3,119
Nicaragua
31
466
Panama
112
637
Paraguay
49
509
Peru
265
1,431
Trinidad
and Tobago
0
19
Uruguay
50
427
Venezuela
30
334
Regional
0
686
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MDB Lending to Individual Countries
AFRICAN DEVELOPMENT BANK (AFDB)
1983
Total
Cumulative
(1967-83)
(Million US $)
1983
Total
Cumulative
(1967-83)
Algeria
0
24
Malawi
21
114
Angola
61
63
Mali
1
109
Benin
0
79
Mauritania
0
57
Botswana
38
126
Mauritius
0
33
Burundi
12
116
Morocco
32
114
Cameroon
24
116
Mozambique
0
119
Cape Verde
2
34
Niger
3
67
C.A.R.
15
78
Nigeria
0
7
Chad
0
43
Rwanda
32
105
Comoros
0
57
Sao Tome
0
8
Congo
0
87
Senegal
5
75
Djibouti
13
14
Seychelles
9
21
Egypt
22
144
Sierra Leone
0
48
Eq.Guinea
5
21
Somalia
5
61
Ethiopia
55
179
Sudan
0
69
Gabon
20
69
Swaziland
11
59
Gambia
21
69
Tanzania
22
138
Ghana
31
96
Togo
0
69
Guinea
44
100
Tunisia
47
170
Guinea-Bissau
6
53
Uganda
38
126
Ivory Coast
14
65
Upper Volta
14
75
Kenya
56
166
Zaire
72
215
Lesotho
16
81
Zambia
27
127
Libya
0
0
Zimbabwe
7
46
Liberia
19
91
Regional
34
117
Madagascar
76
123
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MDB L
AS
ending to Individual C
IAN DEVELOPMENT BANK (
1983
Total
ountries
ADB)
(Million US $)
Cumulative
(1967-83)
Afghanistan
0
95
Bangladesh
273
1,320
Bhutan
5
5
Burma
80
486
Cook Islands
0
3
Fiji
0
46
Hong Kong
0
102
Indonesi
a
426
2,366
Kampuche
a
0
2
Kiribati
0
2
Korea, S
outh
193
1,776
Laos
14
51
Malaysia
82
885
Maldives
0
1
Nepal
83
380
Pakistan
312
1,766
Papua Ne
w Guinea
28
165
Philippi
nes
235
1
835
Singapor
e
0
,
181
Solomon
Islands
8
23
Sri Lank
a
35
356
Taiwan
0
100
Thailand
114
1
360
Tonga
2
,
8
Vanuatu
2
Vietnam
45
Western
Samoa
37
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