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More the Merrier. All told, the World Bank by the end of fiscal 1956 (next week) will have made 151 loans to 43 nations for a grand total of $2,750,000,000. Next year the funds should flow even faster. Within the next few months, a new World Bank subsidiary, the International Finance Corp., will start operating to bring more private investment into the bank's projects. Currently, the bank cannot lend funds that are not backed up by member government guarantees. IFC will answer the need for more risk capital by being empowered to invest directly in productive private enterprises without a government guarantee. With a U.S. Government subscription of $35.2 million, IFC already has $64.6 million, will soon have $75 million and enough to start lending.
So far the World Bank has been largely an intergovernmental operation. But Banker Black hopes that IFC will act as a catalyst to draw in more private investment in developing nations abroad. As it is, the bank has already mobilized nearly $1 billion in private investment overseas by selling its bonds on world security markets, the best proof of the soundness of its projects. But there is need for much more.
For businessmen with vision, Black feels that the prospects for more international development are truly impressive. Vast new markets are being opened by the growing populations of Latin America. Asia and Africa. Yet Ethiopia, for example, with nearly as many people as New York state, buys less than 50¢ worth of U.S. products per capita a year v. nearly $50 per capita for such developed nations as Belgium and Luxembourg. "The question of economic development is important to every man, woman and child in America," says Black. "We have built up our productive capacity. We have got to have people to sell it to. It's as simple as that."
Banker Black draws a parallel between the development of backward nations and the South's renaissance after the Civil War. Says he: "The Civil War knocked us flat on our backs and left us there for a period of nearly 20 years. Slowly and painfully we picked ourselves up. We began to save and invest a little money in farming and industry. Other investment came creeping cautiously in from the North. A little capital begot more capital; a little expansion begot more expansion. The process began accelerating around the time of the first World War, and in the past two decades has been moving at a phenomenal rate. We are today one of the fastest-developing regions not only in the U.S. but in the world. When you see development in the perspective of decades, then it is a very exciting and dramatic business indeed—a business which can make all the difference in our incomes, in the opportunities for us and our children, in the satisfactions we get from life."
-*Among the bank's founding fathers: onetime Treasury Braintruster Harry Dexter White, who was posthumously named a Communist spy. The Soviets fought against the formation of a World Bank, have never joined.