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World Bank Document INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION INTERNATIONAL DEVEWPMENT ASSOCIATION Public Disclosure Authorized 1971 ANNUAL MEETINGS OF THE BOARDS OF GOVERNORS SUMMARY PROCEEDINGS Public Disclosure Authorized Public Disclosure Authorized WASmNGTON, D.C. SEPTEMBER 27·0CTOBER 1, 1971 Public Disclosure Authorized INTRODUCTORY NOTE The 1971 Annual Meeting of the Board of Governors of the International Bank for Reconstruction and Development, held jointly with that of the International Monetary Fund, took place in Washington, D.C., September 27-0ctober 1 (inclusive). The Honora­ ble Karl Schiller, Governor of the Bank for Germany, and the Honorable Karl Klasen, Governor of the Fund for Germany, served as Chairmen. The Annual Meetings of the Bank's affiliates, the International Finance Corporation (IFC) and the International Development Association (IDA), were held in conjunction with the Annual Meeting of the Bank. The Summary Proceedings record, in alphabetical order of mem­ ber countries, the texts of statements by Governors relating to the activities of the Bank, IFC and IDA. The texts of statements con­ cerning the IMF are published separately by the Fund. M. M. MENDELS Secretary INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND AFFILIATES Washington, D.C. December 15, 1971 v CONTENTS Page Opening Greetings by John B. Connally, Governor of the Bank and Fund for the United States ............ Opening Address by the Co-Chairman, Karl Schiller. Governor of the Bank for Germany. 2 Annual Address by Robert S. McNamara, President of the Bank and its Affiliates. 7 Statements by Governors and Alternate Governors. .. 31 Concluding Remarks by Mr. McNamara ...... , .... " ... , .. 185 Concluding Remarks by the Co-Chairman, Karl Schiller. .. 187 Remarks by Ali Wardhana, Governor of the Bank for Indonesia .............................. 189 Remarks by J. H. Mensah, Governor of the Bank and Fund for Ghana. .. 190 Documents of the Boards of Governors .................... 191 Schedule of Meetings .............................. " 191 Provisions Relating to the Conduct of the Meetings.. .. 192 Agendas. .. 193 Reports of the Joint Procedures Committee ................. 194 Report I ......................................... " 194 Report IW . ..................................... " 195 Resolutions Adopted by the Board of Governors of the Bank Between 1970 and 1971 Annual Meetings ...... , .. " 196 No. 264 ... Increase of $3,000 Million in Authorized Capital Stock ................................. " 196 No. 265 ... Increase in Subscription by India ......... " 197 No. 266 ... Membership of Fiji. .. 198 No. 267 ... Place and Date of 1973 Annual Meetings ..... 200 No. 268 ... Agreement with World Health Organization .. 200 No. 269 ... Allocation of Net Income. .. 200 Resolution Adopted by the Board of Governors of the Bank at the 1971 Annual Meeting .... " ......... " " " 201 No. 270 ... Financial Statements, Auditors' Report and Administrative Budget. .......................... 201 IReport II related to the business 0/ the Fund. VII Resolution Adopted by the Board of Governors of IFC at the 1971 Annual Meeting ........................ , 201 No. 79 ... Financial Statements, Auditors' Report and Administrative Budget. .. 201 Resolutions Adopted by the Board of Governors of IDA Between 1970 and 1971 Annual Meetings ........... 202 No. 77 ... Additions to Resources: Third Replenishment .. 202 No. 78 ... IDA Third Replenishment: Voting Rights of Certain Part II Members. .. 206 No. 79 ... Membership of Equatorial Guinea ............ 206 No. 80 ... Membership of Fiji ......................... 208 No. 81 ... Agreement with World Health Organization ... 209 Resolution Adopted by the Board of Governors of IDA at the 1971 Annual Meeting ....................... " 209 No. 82 ... Financial Statements, Auditors' Report and Administrative Budget. ....................... " 209 Report of the Executive Directors of the Bank and IDA .. " 210 Proposed Cooperative Arrangements with WH O. .. 210 Reports of the Executive Directors of the Bank .............. 215 Increase in Authorized Capital Stock ................... 215 India: Increase in Subscription under Article II, Section 3(c) of the Articles of Agreement. ................ 216 Allocation of Net Income. .. 216 Reports of the Executive Directors of IDA ................ 217 Additions to IDA Resources: Third Replenishment. .. 217 Study by the Executive Directors on the Means for Providing Additional Resources and of an Adjustment of Voting Rights ...................... 230 Further Study of Adjustment of Voting Power. .. 240 IDA Third Replenishment: Voting Rights of Certain Part II Members. .. 259 Accredited Members of Delegations at 1971 Annual Meetings 262 Observers at 1971 Annual Meetings ........................ 287 Executive Directors and Alternates ....................... , 289 Officers of the Boards of Governors and Joint Procedures Committee for 1971-72 ............ , ., ..... , ., .... 290 viii --------------_._-_.. ------------------- OPENING GREETINGS BY JOHN B. CONNALLY GOVERNOR OF mE BANK AND FUND FOR mE UNITED STATES Chairman Schiller, Chairman Klasen, Mr. McNamara, Mr. Schweitzer, fellow Governors, distinguished guests, ladies and gentlemen: On behalf of the President, the Government and people of the United States, it is my honor to officially welcome the Governors of the Bank Group and of the Fund, their associates and the officials of these organizations to Washington to hold this Annual Meeting. We meet at a time of major change in financial and trade relation­ ships among countries. Some would regard this as a time of crisis and would focus their attention mainly on the dangers of division and the failure of cooperation. Without minimizing those dangers, I also see in the present situation an unparalleled opportunity for constructive initiative. If we but seize the historic chance that we now have, we can build a financial system as well adapted for the next quarter century as our predecessors at Bretton Woods built for the quarter century just concluded. It is in this spirit-looking toward a new generation ahead of cooperative progress-that I welcome the beginning of these delib­ erations. The good wishes of the American Government and people go with each of you as you pursue your important and constructive tasks. 1 OPENING ADDRESS BY THE CO-CHAIRMAN KARL SCHILLER GOVERNOR OF THE BANK FOR GERMANY On behalf of my Co-Chainnan, Governor Klasen, and myself, I cordially welcome all Governors, Alternates, Advisors, Official Observers and Special Guests to the Twenty-Sixth Annual Meetings of the International Bank for Reconstruction and Development and its affiliates and the International Monetary Fund. I take particular pleasure in extending a special greeting to the Governors and Alternates for Barbados1 and Fiji,2 who are partici­ pating in these meetings for the first time, and to the Observers from Oman, which has applied for membership in both the Bank and the Fund, and to those from Western Samoa, which has applied to join the Fund. I am sure that I speak for everyone present in thanking the Governor for the United States for his gracious remarks and in expressing our profound appreciation for the generous hospitality which is being extended to us once again by the Government and people of our host country. It is inevitable that world attention this week will be focused on our discussions in the field of monetary affairs. Our meetings have been awaited with some apprehension, but also with keen expecta­ tion. The need to re-establish orderly conditions in the world mone­ tary system and to put it on a sounder basis is widely recognized. We are presented with very basic and difficult questions. We cannot expect to find full and final answers to all these questions during our present meetings, but we must at least endeavor to give impetus and direction to their solution. The seriousness of the present disturbances is not in question. It is in the common interest of all countries, large and small, developed and less developed, that a liberal and multilateral regime of trade and payments be preserved. The problems we are facing are not problems of anyone country or group, let alone of any particular institution. They concern the international community at large-all the governments, the banking groups, and other financial communi­ ties represented here. Our regular Annual Meetings this year could hardly have been convened at a better time because they present us with an important opportunity to deal with the serious situation that has recently arisen in world payments. These meetings are a challenge to our spirit of responsibility and our determination. We have to demonstrate to the world that international cooperation will stand the most difficult test the world monetary system has undergone since the creation of 'Member of the Fund. 'Member of the Bank and Fund. 2 the Bretton Woods Institutions. I am firmly convinced that by our combined efforts we will pass the test. The disruption in the system which occurred in mid-August should in my view be seen as a challenge and a chance. A major jolt of this nature can act as a powerful catalyst for comprehensive re­ form. I have been encouraged by the emphasis that has been given to this aspect in several important pronouncements. Ideas that some time ago appeared overly ambitious are today examined as possible steps in a program of realistic reforms. In the clouds that have gath­ ered in recent weeks, this
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