Abstract
For the purpose of this study multilateral financial institutions (MFIs) are being defined as those institutions which include developing as well as the developed countries in their membership. These institutions have played a pivotal and growing role in the flow of financial resources to LDCs. Looking at the external financial receipts of LDCs one notices that LDCs received 9.2 per cent of their total resources through these institutions in 1970, 13.7 per cent in 1980, and 7.6 per cent in 1983. Approximately 90 per cent of the financial resources received by the MFIs came from the industrial market economies. Many of the MFIs which are now one of the important channels of providing concessional financial resources to LDCs were created in the decade of 1958–67. Prior to this the MFIs were limited essentially to the UN and its specialised agencies and the Bretton Woods institutions. The newly created institutions were of two kinds: First, two major funds were created in the framework of the existing institutions with a view to consolidating multilateral operations. These were the International Development Association (IDA) (1960) administered by the World Bank, and the UN Development Programme (1965), forged out of the Expanded Programme of Technical Assistance and the Special Fund. Second, this was also the decade marked by the establishment of three principal regional banks; namely, the Inter-American Development Bank (IDB) (1959), the African Development Bank (AfDB) (1963) and the Asian Development Bank (ADB) (1966).
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes and References
Partners in Development (Commission on International Development. Chairman: Lester B. Pearson) (New York: Praeger Publishers, 1974) p. 128.
United States Participation in the Multilateral Development Banks in the 1980s (Washington, DC: Department of Treasury, Feb 1982) pp.2–4.
Ibid., p. 55.
Cf. Chapter 4.
According to the 1983 Annual Report the World Bank lent $10 330 million, which is the highest amount loaned by any donor, bilateral or multilateral.
Cf. the fourth section of his chapter, ‘Interactions between the multilateral institutions and donors’.
W. Baer, ‘The World Bank Group and the Process of Socio-economic Development in the Third World’, World Development (June 1974) pp. 1–10.
The World Bank Policies and Operations (Washington, DC: IBRD, June 1957).
H. G. Johnson, The World Economy at the Crossroad (Oxford: Clarendon Press, 1965) p. 71.
E. R. Black, ‘Financing Economic Development’, United Nations Review, vol. 8, no. 2, 1972 p. 20.
E. S. Mason and R. E. Asher, The World Bank Since Bretton Woods (Washington, DC: The Brookings Institution, 1973) pp. 150–95.
Ibid.
President of the IBRD between 1963 and 1965.
R. S. McNamara, One Hundred Countries, Two Billion People (New York: Praeger Publishers, 1973) p. 55.
Quoted by E. Reid in Strengthening the World Bank (Chicago, Ill.: The Adlai Stevenson Institute, 1973) p. 20.
McNamara, op. cit. p. 115.
Policies and Operations: The World Bank Group (Washington, DC: IBRD, 1974) pp. 41–3.
The Economist (16 Apr 1983) p. 14. See also The Economist, 3 Dec 1983, p. 20.
The expression ‘World Bank group’ includes the IDA and the IFC.
E. S. Mason and R. E. Asher, op. cit. pp. 201–6.
Annual Report 1970, World Bank, pp. 23–4.
Ibid. p. 26.
Annual Report 1982, World Bank, p. 12.
Annual Report 1984, World Bank, p. 15.
P. D. Henderson, ‘Terms and Flexibility of Bank Lending’, in J. P. Lewis and I. Kapur (eds) The World Bank Group, Multinational Aid and the 1970s (Lexington, Mass: Lexington Books, 1973).
Annual Report 1973, World Bank, p. 71.
Annual Report 1982, World Bank, pp. 52–3.
Financial Times (3 Mar 1983) p.4.
J. C. Whitehead, ‘Sowing the Seeds of Prosperity’, Euromoney (Oct 1983) p. 243.
Financial Times, 4 April 1985.
Article III, section 4, clause vii.
Programme lending is a technique based on the macroeconomic gap analysis. With the help of the Chenery-Strout model it is determined what are the financial needs of an LDC to maintain a certain rate of growth. On the one hand, statistical projections are made for imports, exports, debt service, investment and other variables in the borrowing LDC. On the other hand, macroeconomic projections are made for the borrower’s capital requirements. Then the sources of finance and their volume are quantified; these sources are: trade, private investment, export credits, and bilateral and multilateral assistance. In the end the ‘gap’ between the two, that is, need and availability of financial resources is determined, it is calculated how much of this gap can be filled by the Bank.
M. Haq, ‘Transfer of Resources’, in J. P. Lewis and I. Kapur (eds) op. cit.
Cf. note 28.
Quoted in The United States and the Multilateral Development Banks (Washington, DC: Mar 1974). Committee on Foreign Affairs, Congressional Research Service, Library of Congress.
Hearings before a Subcommittee of the Committee on Banking and Currency, US Senate, Eighty-fifth Congress, Second Session, on SR 264, International Development Association (Washington, DC: 1958).
IDA, In Retrospect, published for the World Bank (New York, London: Oxford University Press, 1982) p. 1.
W. Baer, ‘The World Bank Group and the Process of Socio-economic Development in the Third World’, op. cit.
IDA, In Retrospect, op. cit. pp. 23–4.
Special Report to the President and to Congress on the Proposed Replenishment of the Resources of the IDA (Oct 1973) (Washington, DC: The Committee on Banking and Currency, US Government, 1973).
Cf. Chapter 2.
IDA, In Retrospect, op cit. p. 21.
Ibid. pp. 36–7.
Two events which supported the IFC idea were: the Gray Report submitted to President Truman in 1950 and the Rockefeller Report, called Partners in Progress, submitted in 1951. Later on, the Treasury Department, Federal Reserve System and the Export Import Bank were to take a negative stance on it.
R. L. Garner, President, International Finance Corporation, Statement at the Tenth Annual Meeting of the Board of Governors of IBRD (Washington, DC: 1955) p. 3.
Annual Report, IFC, 1959 (1960), p.4.
U. Kirdar, The Structure of United Nations Economic Aid to Underdeveloped Countries (The Hague: Martinus Nijhoff, 1966) pp. 176–7.
E. R. Black, Address to the 19th Session of the Economic and Social Council of the United Nations (IFC, undated) p.6.
J. C. Baker, The International Finance Corporation (New York: Praeger Publishers, 1968).
P. Bayless, ‘Merchant Banker of the Third World’, Institutional Investor (Sep 1982) pp. 213–22.
Annual Report of the IFC, 1982, p. 16.
P. Bayless, op. cit.
The World Bank, IFC and IDA, prepared by the Staff of the World Bank, Apr 1962 (Washington, DC: World Bank) pp. 99–100.
Annual Report of the IFC, 1982, p.6. See also International Finance Corporation, The Banker, London, March 1985, pp. 66–7.
L. B. Johnson, Public Papers of the President of the United States, 1965, vol. 1, (Washington, DC: US Government Printing Office, 1966) p.397.
Annual Report of the ADB, 1968.
Published in February 1969.
ADB, Quarterly Review (Apr 1981).
N. Peagom, ‘Guiding Asia’s Growth’, Euromoney (London: April 1984), pp.S1-S10.
See also Gabriel Rosario, ‘Is the Asian Development Bank Lending Too Much?’, The Banker (London: April 1985), pp. 53–7.
J. White, Regional Development Banks (London: Overseas Development Institute, 1970) pp. 110–21.
Annual Report of the AfDB (Abidjan: African Development Bank, 1981) p.11.
Ibid. pp. 33–4.
R. K. A. Gardiner and J. Pickett, The African Development Bank, 1964–1984 (Abidjan, Ivory Coast: African Development Bank, 1984) pp. 161–5.
The United States and the Multilateral Development Banks (Washington, DC: Committee on Foreign Affairs, Congressional Research Service, Library of Congress, Mar 1974) pp. 18–19.
Ibid. p. 19.
J. White, Regional Development Banks, op. cit. pp. 164–86.
Annual Report, IDB (Washington, DC: 1967 Inter-American Development Bank, 1968) p. 61.
Annual Report, IDB (Washington, DC: 1968 Inter-American Development Bank, 1969) p.3.
J. A. Lynn, The IDB’s First Decade and Perspectives for the Future (Punta del Este, Uruguay: Inter-American Development Bank, Round Table, Apr 1970) p. 3.
A. Ortiz Mena, President, IDB, Address before the Third Meeting of the United Nations (Santiago, Chile: 21 Apr 1972).
A. Ortiz Mena, President, IDB, Address at the Thirteenth Meeting of the Board of Governors of the IDB (Quito, Ecuador: 9 May 1972).
Annual Report, 1981, IDB (Washington, DC: 1982).
A Partnership in Action, IDB (Washington, DC: n.d.).
The Wall Street Journal (New York: 28 Mar 1985).
United States Participation in the Multilateral Development Banks in the 1980s (Washington, DC: US Treasury, 1982).
The International Monetary Fund: Its Financial Organization and Activities, Pamphlet Series, No. 42 (IMF, Washington, DC: 1984), p.77.
G. Bird, The IMF and the Developing Countries (London: Overseas Development Institute March 1981) pp. 14–15.
J. Gold, Conditionality, Pamphlet Series, No. 31 (Washington, DC: IMF, 1979) p. 1.
T. Killick, IMF Stabilization Programmes (London: Overseas Development Institute Working Paper No. 6, Sep 1981).
Annual Report, IMF, 1965, p. 10.
They include measures to control some or all of the following: domestic credit expansion, government expenditure and taxation (related to money supply), foreign indebtedness, prices and wages, trade practices and exchange rate.
A. I. MacBean and P. N. Snowden, International Institutions in Trade and Finance (London: Allen & Unwin, 1981) pp. 59–60.
J. Gold, Financial Assistance by the International Monetary Fund: Law and Practice, Pamphlet Series No. 27 (Washington, DC: IMF, 1980) pp. 24–36.
J. de Larosière, ‘Text of an Address before the Economic and Social Council of the UN’; in IMF Survey (7 July 1980).
G. Bird, The IMF and the Developing Countries, op. cit. p. 12.
C. Payer, The Debt Trap: The IMF and the Third World (Harmondsworth, Middx: Penguin Books, 1974).
G. Bird, The International Monetary System and the Less Developed Countries (London: Macmillan Press, 1978) p. 17.
G. Bird, ibid.
It was established by Resolution 2029 (xx), adopted by the UN General Assembly on 22 November 1965, as from 1 January 1966.
The following organisations serve as participating and executing agencies of the UNDP: UN, ILO, FAO, UNESCO, WHO, IBRD, ICAO, ITU, WMO, IAEA, UPU, IMCO, UNIDO, UNCTAD, IDB and UNICEF.
B. Mores, UNDP Progress Report 1978 (New York: UN Apr 1979).
V. Duchworth-Baker, Breakthrough to Tomorrow (New York: UN Centre for Economic and Social Information, 1970) pp. 23–4.
A Report on Growth in the World-wide Work of the UNDP, II.D.ii (New York: UN 1968) p.15.
A. Robinson, Future Tasks for UNDP (London: International Economic Association, 1977) pp.31–6.
Development Co-operation, 1982 Review (Paris: OECD, 1983) pp. 79–80.
‘Pledges Down — Assistance Plans Cut’, Development in Action (New York: UNDP, 1983) (Oct–Dec).
Copyright information
© 1986 Dilip K. Das
About this chapter
Cite this chapter
Das, D.K. (1986). Resource Flows to and from the Multilateral Financial Institutions. In: Migration of Financial Resources to Developing Countries. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18291-6_6
Download citation
DOI: https://doi.org/10.1007/978-1-349-18291-6_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-18293-0
Online ISBN: 978-1-349-18291-6
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)