THE INTERNATIONAL FINANCE CORPORATION 463

CHAPTER VII THE INTERNATIONAL FINANCE CORPORATION (IFC)

The International Finance Corporation (IFC)1 sufficiently successful to attract private investors. is an international financial institution closely IFC is prepared to give its private partners the affiliated with the International Bank for right of first refusal to purchase its investments. Reconstruction and Development. Its pur- Since its capital is in United States dollars, pose is to further economic development by en- IFC will, in its early years, generally make couraging the growth of productive private en- investments expressed in United States dollars. terprise in the less developed areas of the world. But it will invest, at least in part, in other Membership in IFC is open to countries which currencies if justified by the stability of such are members of the International Bank. The currencies and by the participation rights of the Corporation began operations on 24 July 1956, investment. with 31 members subscribing $78,366,000 of the Governors of the International Bank from authorized capital of $100 million. Twenty-two countries which are also members of IFC are additional countries had joined IFC by 31 Governors of IFC. The inaugural meeting of December 1957, bringing the total subscribed the Board of Governors was held in Washington, capital to almost $93 million and its total D.C., in September 1956; the first annual membership to 53 countries. An agreement on meeting was held in conjunction with the the relationship between the United Nations annual meeting of the International Bank in and IFC was approved by the United Nations Washington, D.C., on 27 September 1957. The General Assembly on 20 February 1957.2 Board of Governors is required to meet once IFC hopes to achieve its purpose of furthering each year, and it has become the practice to economic development in its less developed hold this annual meeting in September. member countries by investing—without govern- The Corporation's Board of Directors is com- ment guarantee—in productive private enter- posed of those Executive Directors of the Inter- prises in association with private investors who national Bank who represent at least one can provide competent management, in cases Government which is also a member of the where sufficient private capital is not available Corporation. on reasonable terms. IFC is an investing rather Between July and December 1956, the than a lending institution. Corporation established a working organization, IFC will invest only in private enterprises; adopted operating policies for the initial stage it will not invest in enterprises which are of its activities, developed working procedures government owned and operated. In its early and recruited a staff. At the end of December years, IFC will normally invest in industrial 1957, the Corporation had made five commit- enterprises and will deal with companies whose ments totalling the equivalent of nearly $6 assets, after financing, are at least $500,000. million, as follows: $660,000 investment in Its investments will not cover more than half Duncan's Holdings Ltd., in Australia; $2 the cost of an enterprise and will range in size million in Siemens do Brasil Companhia de from about $100,000 to $2 million in its first Electricidade, in Brazil; $2.2 million in Empresa years. IFC investments will not be conventional, Minera de Mantos Blancos, S.A., in Chile; and, fixed-interest loans; they will be loans carrying in Mexico, the equivalent of $600,000 in some interest and some right to participate in Engranes y Productos Industrials, S.A., and the growth of the business. 1 For further information, particularly about the IFC will make investments which will encour- origins of the International Finance Corporation, see age participation by private investors either in previous volumes of the Yearbook. See also the First the initial stages of an enterprise or sub- Annual Report of the (IFC) Board of Directors to the Board of Governors, 1956-1957, and Summary Pro- sequently through the purchase of IFC's invest- ceedings of the First Annual Meeting of the Board ment. IFC intends to revolve its portfolio by of Governors, 1957. selling its investments as soon as they prove 2See Y.U.N., 1956, pp. 272, 274-76. 464 THE INTER-GOVERNMENTAL ORGANIZATIONS the equivalent of $500,000 in Bristol de Mexico, Expenses S.A. Administrative expenses: Personal services $ 424,905 FINANCIAL ACTIVITIES Contributions to staff benefits 38,294 AND RESOURCES Fees and compensation 42,123 As received, the Coroporation's subscribed Representation 13,004 Travel 69,395 capital has been invested in United States Supplies 13,611 Government obligations with maturities up to Rents and utility services 51,729 five years. Gross income from these investments Communication services 15,826 to 30 June 1957 was $2,408,048, and after Furniture and equipment 33,743 deduction of operating expenses of $732,666 Books and library services 8,834 Printing 13,858 net income for the year was $1,675,382. Insurance 1,981 STATEMENT OF INCOME AND EXPENSES Other expenses 5,363 (24 July 1956-30 June 1957) $ 732,666 Income Income from investments $2,408,048 Net income $1,675,382

ANNEX I. MEMBERS OF INTERNATIONAL FINANCE CORPORATION, THEIR SUBSCRIPTIONS AND VOTING POWER (As of 31 December 1957)

SUBSCRIPTION VOTING POWER SUBSCRIPTION VOTING POWER Amount (in Number Per cent Amount (in Number Per cent thousands of of of thousands of of of MEMBER U.S. dollars) Votes Total MEMBER U.S. dollars) Votes Total Afghanistan 111 361 .34 India 4,431 4,681 4.41 Australia 2,215 2,465 2.32 Indonesia 1,218 1,468 1.38 Austria 554 804 .76 Iran 372 622 .59 Belgium 2,492 2,742 2.58 Iraq 67 317 .30 Bolivia 78 328 .31 Israel 50 300 .28 Brazil 1,163 1,413 1.33 Italy 1,994 2,244 2.11 Burma 166 416 .39 Japan 2,769 3,019 2.84 Canada 3,600 3,850 3.63 Jordan 33 283 .27 Ceylon 166 416 .39 Lebanon 50 300 .28 Chile 388 638 .60 Luxembourg 111 361 .34 Colombia 388 638 .60 Mexico 720 970 .91 Costa Rica 22 272 .26 Netherlands 3,046 3,296 3.11 Cuba 388 638 .60 Nicaragua 9 259 .24 753 1,003 .94 Norway 554 804 .76 Dominican Republic 22 272 .26 Pakistan 1,108 1,358 1.28 Ecuador 35 285 .27 Panama 2 252 .24 Egypt 590 840 .79 Paraguay 16 266 .25 El Salvador 11 261 .25 Peru 194 444 .42 Ethiopia 33 283 .27 Philippines 166 416 .39 Finland 421 671 .63 Sweden 1,108 1,358 1.28 France 5,815 6,065 5.72 Thailand 139 389 .37 Germany 3,655 3,905 3.68 Turkey 476 726 .68 Greece 277 527 .50 Union of South Africa 1,108 1,358 1.28 Guatemala 22 272 .26 14,400 14,650 13.81 Haiti 22 272 .26 United States 35,168 35,418 33.39 Honduras 11 261 .25 Venezuela 116 366 .35 Iceland 11 261 .25 Totals $92,834 106,084 100.00

ANNEX II. BOARD OF GOVERNORS (As of 31 December 1957)

MEMBER GOVERNOR ALTERNATE Afghanistan Abdullah Malikyar Abdul Karim Hakimi Australia Sir Arthur Fadden Sir Roland Wilson THE INTERNATIONAL FINANCE CORPORATION 465

MEMBER GOVERNOR ALTERNATE Austria Reinhard Kamitz Wilhelm Teufenstein Belgium Henri Liebaert Jean Van Nieuwenhuyse Bolivia Miguel Gisbert N. Fernando Pou Munt Brazil José Marí a Alkmim Eurico de Aguiar Salles Burma Boh Khin Maung Gale U Kyaw Nyun Canada Donald M. Fleming A. F. W. Plumptre Ceylon Stanley de Zoysa Rajendra Coomaraswamy Chile Felipe Herrera Colombia Ignacio Copete-Lizarralde Eduardo Arias Robledo Costa Rica Angel Coronas Mario Ferná ndez Cuba Joaquí n E. Meyer Denmark Svend Nielsen Hakon Jespersen Dominican Republic Arturo Despradel Oscar G. Ginebra Henrí quez Ecuador Federico Intriago José R. Chiriboga V. Egypt Ahmed Zaki Saad Albert Mansour El Salvador Carlos J. Canessa Luis Escalante-Arce Ethiopia Menasse Lemma George Peters Rea Finland Klaus Waris Ralf Torngren France Minister of Finance Pierre Mendès-France Germany, Fed. Rep. of Ludwig Erhard Fritz Schaeffer Greece Gregory Cassimatis Ioannis Paraskevopoulos Guatemala Edgar Alvarado Pinetta Mario Asturias-Arévalo Haiti Fritz Saint Firmin Thébaud Silvere Pilie Honduras Jorge Bueso-Arias Guillermo Ló pez Rodezno Iceland Petur Benediktsson Vilhjalmur Thor India T. T. Krishnamachari H. M. Patel Indonesia Soetikno Slamet Loekman Hakim Iran Ali Asghar Nasser Djalaledin Aghili Iraq Ali Mumtaz Al-Daftari Mudhafar H. Jamil Israel David Horowitz Martin Rosenbluth Italy Donato Menichella Giorgio Cigliana-Piazza Japan Hisato Ichimada Masamichi Yamagiwa Jordan Anastas Hanania Mohammad Ali Rida Lebanon Andre Tueni Raja Himadeh Luxembourg Pierre Werner René Franck Mexico Antonio Carrillo Flores José Herná ndez Delgado Netherlands H. J. Hofstra A. M. de Jong Nicaragua Guillermo Sevilla Sacasa Enrique Delgado Norway Arne Skaug Carsten Nielsen Pakistan Syed Amjad Ali M. A. Mozaffar Panama Ricardo M. Arias Espinosa Julio E. Heurtematte Paraguay Osvaldo Chaves Federico Mandelburger Peru Fernando Berckemeyer Emilio Foley Philippines Miguel Cuaderno, Sr. Eduardo Z. Romuá ldez Sweden G. E. Straeng N. G. Lange Thailand Serm Vinicchayakul Puey Ungphakorn Turkey Hasan Polatkan Sait Naci Ergin Union of South Africa Jozua Francois Naude M. H. de Kock United Kingdom Peter Thorneycroft Sir Leslie Rowan United States Robert B. Anderson C. Douglas Dillon Venezuela José Joaquí n Gonzá lez- Alejandro J. Huizi-Aguiar Gorrondona, Jr.

ANNEX III. EXECUTIVE DIRECTORS AND ALTERNATES (As of 31 December 1957) Director Alternate(s) Member Government(s) Tom B. Coughran John S. Hooker United States G. F. Thorold David B. Pitblado United Kingdom René Larre Jean-Maxime Levèque France V. Narahari Rao P. J. J. Pinto India 466 THE INTER-GOVERNMENTAL ORGANIZATIONS Director Alternate (s) Member Government (s) Thomas Basyn Max Thurn (Austria) Belgium, Austria, Turkey, Luxembourg (Belgium) Takeshi Watanabe D. C. Gunesekera Japan, Burma, Ceylon, Thailand (Japan) (Ceylon) Soetikno Slamet Carlo Gragnani (Italy) Italy, Indonesia, Greece, Afghanistan (Indonesia) Sven Viig (Norway) Bjorn Tryggvason Sweden, Denmark, Norway, Finland, Iceland ( Iceland ) Mohammad Shoaib Ali Akbar Khosropur Pakistan, Egypt, Iran, Iraq, Lebanon, Ethiopia, Jordan (Pakistan) (Iran) Luis Machado (Cuba) Jorge A. Montealegre Mexico, Cuba, Peru, Venezuela, Costa Rica, Guate- (Nicaragua) mala, El Salvador, Honduras, Nicaragua, Panama Otto Donner Karl-Heinz Drechsler Federal Republic of Germany Louis Rasminsky Alan B. Hockin Canada B. B. Callaghan B. E. Fleming Australia, Union of South Africa (Australia) (Australia) P. Lieftinck J. Smole (Yugoslavia) Netherlands, Israel (Netherlands) L. R. W. Soutendijk* (Netherlands) Jorge Mejí a-Palacio Brazil, Colombia, Philippines, Ecuador, Dominican (Colombia) Republic, Haiti Victor A. Pane Persio da Silva Chile, Bolivia, Paraguay (Paraguay) (Paraguay) * Temporary.

ANNEX IV. OFFICERS AND OFFICES (As of 31 December 1957) PRINCIPAL OFFICERS President: Robert L. Garner General Counsel: Davidson Sommers. Vice-President: John G. Beevor. NOTE: The offices of Treasurer, Secretary, Director Director of Investments: Broderick Haskell. of Administration and Director of Information are Engineering Adviser: William J. Jenkins. held by the corresponding officers of the International Assistant to the President: Richard H. Demuth. Bank for Reconstruction and Development.

HEADQUARTERS AND REGIONAL OFFICES

HEADQUARTERS International Finance Corporation 1818 H Street, N.W. Washington 25, D.C. Cable Address: CORINTFIN WASHINGTON

OTHER OFFICES International Finance Corporation International Finance Corporation Office Office 67 rue de Lille 27/32 Old Jewry Paris 7e, France London, E.C.2, England.