ABSTRACT
Monetary Fund and the World Bank, afford us a new approach to participate in world-wide economic developments. They were opened in due course to the Federal Republic, and we made our entry in the autumn of 1952. The World Bank is of special topical importance: this institution has now carried its studies of German creditworthiness and of the openings we offer for investment to a successful conclusion. The World Bank is a joint foundation with fifty-four member States. Its resources are derived from contributions made by the members and from flotations which are made on the capital markets of different countries. At present the Bank's task is to finance, after thorough investigation, development projects in every part of the world, which it does by granting credits to the Governments of the member States or to concerns whose indebtedness must then be guaranteed by the country's government. In principle the World Bank finances projects for which it has proved impossible to mobilise domestic finance or the foreign exchange needed for the requisite imports. I t is a condition that these projects must bring about a vigorous expansion in the country's economy, calculated to contribute largely to the growth of production, to a rise in the standard of living, and to the foundation of undertakings based upon the original one. Under this heading credits have been granted to India for opening up the densely populated Damodar Valley, to certain Latin-American countries for the construction of hydro-electric projects and communications, and to Australia for the improvement of farming and for the importation of earth-moving machinery. The Bank finances the import component of the project, and in doing so usually mobilises credits amounting to several times the money it
Since the autumn of 1952 the Federal Republic has been represented by a Governor (Ludwig Erhard) and by an alternate Governor (Fritz Schaffer). The Governors constitute the general meeting as representatives of the 'shareholders'; they normally meet once a year. Most of their rights and voting powers have been transferred to the sixteen executive directors, among whom the Diisseldorf banker, Dr. J. Zahn, represents the Federal Republic and also Jugoslavia. Within the directorate the Americans, as the biggest subscribers-subscribers, moreover, of dollars-have the greatest weight. The votes of the United States, Great Britain, Nationalist China, France and India suffice for an absolute majority. The German share in the Bank's authorised capital of nominally $10 milliards amounts to $330 millions, of which 2% have to be made available in gold or dollars, and 18% in Deutsche Marks. The latter quota can be utilised by the Bank only with our assent. The remaining 80% are our conditional liability as a member country, and can be mobilised only if the Bank needs them to meet obligations arising out of loans taken over from other parties or guaranteed by the Bank itself.
