Fifteen Years at the World Bank
Publication
The Empire Club of Canada Addresses (Toronto, Canada), 11 Oct 1962, p. 11-25
Description
Creator
Iliff, Sir William, Speaker
Media Type
Text
Item Type
Speeches
Description
A detailed and personal retrospective and history of the World Bank. A review of some of the major changes that have taken place in the world over the last 15 years, the paramount one being the population increase. The World Bank since 1948 when the speaker became Director of the Loan Department. His arrival coincident with the beginning of a period of transition for the World Bank. Many milestones in the development of the Bank. Figures and details of development loans. The Department of Technical Assistance, set up in 1952, with examples of its operation. The Bank's involvements in political negotiations and disputes, with examples. Problems with development financing. The International Finance Corporation as an affiliate of the Bank, set up in 1956. The growing pace of world developments and the problems that brings to the World Bank. The increasing inability of developing nations to keep up with payments. The establishment of the International Development Association (IDA). How the IDA and IDA credits work. The need for a firm decision by the "rich" countries to the "poor" countries. The widening gap between rich and poor. The need to find means to narrow this international gap as the most urgent and challenging problem facing this generation and new generations to come.
Date of Original
11 Oct 1962
Subject(s)
Language of Item
English
Copyright Statement
The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
Contact
Empire Club of Canada
Email
WWW address
Agency street/mail address

Fairmont Royal York Hotel

100 Front Street West, Floor H

Toronto, ON, M5J 1E3

Full Text
FIFTEEN YEARS AT THE WORLD BANK
An Address by SIR WILLIAM ILIFF Vice-President-World Bank
Thursday, October 11, 1962
CHAIRMAN: The President, Mr. Palmer Kent, Q.C.

MR. KENT: I am delighted to introduce to the members and guests of The Empire Club a prominent and outstanding Britisher who is now the Vice-President of the World Bank, Sir William Iliff.

It is a particular privilege to have Sir William with us today because since he accepted our invitation it has been announced that he will retire from the Bank as of October 31st this year. In making that announcement, Mr. Eugene Black, President of the World Bank said:

"It is with great regret that I have to announce the retirement of my highly valued colleague, Sir William Iliff. His services to the Bank and to its member countries over a period of 14 years have been of a very high order, and all of us at the Bank-Executive, Directors, management and staff-will miss his wise counsel and his administrative skills. Whenever we were faced with a really difficult job, demanding tact, firmness of principle and depth of understanding, it was to Sir William that we turned. As an example of this, surely few men in public life can point to such an achievement as Sir William accomplished in the successful culmination of the Indus Basin negotiations. In the next few weeks we shall, I am sure, hear worldwide tributes to his dedicated work, but I wish to take this opportunity to place on record the deep sense of obligation which he is owed by the entire international community."

Canada, as one of the 66 member nations, is very much involved and interested in the work of the International Bank for Reconstruction and Development. In serving the Bank, Sir William has served Canada, and I would like to acknowledge these services and express our sincere appreciation for them.

Sir William was born in Northern Ireland in 1898. Before joining the Bank in February 1948, he served in the British Civil Service in a variety of positions in the United Kingdom and in the Middle and Far East. He also saw active service in both World Wars, serving in the Indian Army in India, Mesopotamia, Iran and South Russia in World War I and in France with the British Army, until the evacuation at Dunkirk in World War II.

He is going to tell you about the bank and what he has been doing in it and, therefore, I shall not try to recount these services. Suffice it to say that for valued and distinguished service, Her Majesty the Queen was pleased to confer a knighthood on him in January 1961.

I present to you Sir William Iliff, Vice-President of the International Bank for Reconstruction and Development, who will address you on the subject "Fifteen Years with the World Bank".

SIR WILLIAM ILIFF: This talk of mine is entitled "Fifteen Years with the World Bank". At the end of this month I shall have vacated my office as a Vice President of the Bank, and I shall therefore, I hope, be forgiven if I am mainly retrospective in my approach today.

Let me begin by saying that my first public speech in this hemisphere on the affairs of the Bank was in Vancouver, B.C., almost 15 years ago. It is for me a great privilege to have been asked to address this audience in Toronto today and so to that have been given the chance to make a valedictory address on Canadian soil and to such a distinguished group of Canadian citizens. I hope, too, that what I have to tell of what has happened in the Bank over these years (which cover in fact all but two years of the Bank's existence) may be of some interest to you. But I want first to say a little about the broader background against which the Bank has been growing up.

When one looks around the world as it is today, the changes since 1947 are momentous. Probably the most remarkable is this ... in those 15 years the world's population has increased by almost one-third, from 2,300 million in 1947 to almost 3,000 million today. Such an increase, if it should continue, baffles the imagination. Canada has, of course, some share in responsibility for this phenomenon. She has played her full part and takes some pride as a prosperous and growing nation in having increased her population, partly, it is true, by immigration, from 121/2 to 18 million over those 15 years-an increase of 51/2 million. But in the same period, the teeming countries of Asia have probably added more than 100 times that increase to populations which were already seriously lacking in clothing, food and shelter.

I hasten to assure you, Mr. Chairman, that I have no intention of embarking on a dissertation on the population explosion. I do not think, however, that any consideration of world economic affairs can possibly overlook that one overwhelming fact, which threatens to frustrate all our best endeavours to raise world standards of living.

Other changes have been just as remarkable. I suppose that scientific progress in man's mastery over matter has been as great in the past 15 years as throughout the entire previous history of mankind. I wish there had been some corresponding manifestation of man's mastery of himself. The physical changes since 1948 strike one of course in odd ways. While I myself cannot get wildly enthusiastic about the possibility of visiting the moon, I do find it a source of constant wonder to be able to cross the Atlantic in sedate luxury, and in 5 hours; 15 years ago, the Atlantic air-crossing was still something of a protracted and uncomfortable adventure.

But it is when one considers the international political and economic scene that one realizes how fundamentally the world has been changing. Fifteen years ago, those nations of Western Europe which are now showing an unprecedented pace of economic growth were still bogged down in the aftermath of the Second World War. Germany was still in the depths, and, like Austria, under four-power military government. Another modern pace-setter among the nations, Japan, was also still under military rule, and in a state of acute political unrest and economic depression. Western Europe was staggering also under the blows of successive bad harvests which, on top of wartime destruction, made its prospects of recovery look bleak indeed. When I joined the World Bank at the beginning of 1948, the Marshall Plan was still in the stage of discussions among the Western European nations, and the fear still was that Communism would engulf all of continental Europe to the edge of the Atlantic Ocean. China, the most populous nation of the globe, was in convulsion, its regime still undecided. India and Pakistan were licking the great wounds of Partition which were the legacy of their move into independence only a few months before.

In other regions of the world, developments have been no less eventful. In the Middle East, the State of Israel did not exist. The principal Arab countries were still ruled by dynastic monarchs. In Asia and Africa, the British and French colonial empires were virtually as they had been for 100 years; now those colonies have become a new array of independent nations clamouring for a full place in the councils of the world.

This has brought fundamental changes in the international organization of nations. In 1948, the Western Bloc was firmly in control in the General Assembly of the United Nations, able to muster an effective majority by the combination of Western Europe and the Americas. How different is the picture today, since the emergence of the Afro-Asian Bloc, which comprises more than 50 of the 104 countries taking part in the 1962 debates of the Assembly, each with a vote equal to the vote of any of the so-called great powers. The world balance of power has altered, and probably will never again be swung only at the whim of the great powers.

In the realm of personalities, perhaps the most striking fact is not change, but rather "plus c'est la meme chose". True, many of the leaders of 15 years ago are gone, among them Mr. Mackenzie King, General Marshall and (if such a name can be uttered in the same breath) Marshal Stalin too. But how durable the others are-Churchill, Truman, Molotov, Trygve Lie, Eisenhower, Attlee and General Montgomery-they may all have left the centre of the stage, but are still with us. And many of the old leaders are still very much in the limelight-deGaulle, Adenauer, Khrushchev, Henri Spaak, Monnet, Macmillan, Chiang Kai Shek, Mao Tse Tung. One is tempted to ask: Are they all so durable because they are politicians, or are they politicians because they are so durable? They say in Latin America that the devil knows so much because he is so old, and not just because he is the devil. All in all, I do not envy the school children of tomorrow who will be expected to absorb the history of this extraordinary decade and a half.

In recent years, revolutionary change has been universal. In no field is this more true than in economic affairs. In the past 15 years the world economy as a whole has been marching forward at a pace which previously had been attained almost by only one country at a time. The patterns of world trade and payments, and of national incomes, have in recent years been moving and changing so rapidly that yesterday's debtor nation is today's creditor, and vice versa. I do not suppose anyone in this room would have believed that the world dollar situation could have reversed itself as it has done in that period of 15 years. Similarly, who, in 1948, when rigid exchange controls and inconvertibility of currencies prevailed almost around the world, would have believed that the international money market could possibly be as fluid and free as it is now in 1962. Only visionaries or wishful thinkers could have imagined that the people of Western Europe would move freely from country to country without even a passport, and no one surely could have foreseen France and Germany in a Common Market, much less the President of France addressing a great gathering in Germany in the German language, and praising the virtues of the German people.

So much for the broad brush. Let me now turn to the changes which the years have brought to the World Bank. I hope you will forgive me if I talk of these changes largely in terms of my own experience, rather than pretend to an objective analysis. I arrived at the Bank in February 1948 to become Director of the Loan Department. At that time, the Bank had 48 members; today it has 83, and it seems certain that it will have at least 100 before another two years are out. At that time, the Bank had made four reconstruction loans in Western Europe totalling $500 million; today, our loan commitments since the beginning have amounted to almost 6 3/4 billion dollars and we have made 322 loans in 60 countries. Of the $500 million of our four reconstruction loans, half had been lent to France. The Netherlands had received almost $190 million and the balance had gone to Denmark and Luxembourg in smaller amounts.

Although we did not know it in February 1948, the reconstruction-lending phase of the Bank's operations had in fact come to an end. The Marshall Plan took over in Western Europe and allowed the Bank to devote itself from then on to its other function, assisting economic development in its less developed member countries. But, short as was the reconstruction phase of our lending, I think it is fair to say that the Bank's reconstruction loans were of vital importance at a critical time. They bridged a gap between the ending of emergency war-time assistance and the beginning of Marshall aid, and they enabled the four recipient countries to make essential imports on a large scale at a time when no other external finance was available to them.

So my arrival at the Bank coincided with the beginning of a period of transition. Negotiations between the Bank and the countries which received its reconstruction loans were greatly facilitated by the fact that the borrowers were all highly developed economies with a competent apparatus of administrative and technical skills. They were able to draw up accurate lists of the goods they needed, and to show how these goods would be used to reconstruct their shattered economies.

Lending for economic growth in the less developed countries of the world was entirely a different matter. It has become almost a cliche to observe that the greatest lack of most of the less developed countries is not money; but skill-skill at every level from the Finance Minister down to the operator of a machine; they had no industrial tradition and possessed few of the organizational features needed for the successful direction of an economy or even for the adequate preparation of projects for financing. Inevitably, therefore, the volume of the Bank's lending was on a modest scale for the next few years, and it was not until about 1950 that it began to reach significant amounts.

A chart of Bank lending for development shows 1948 to 1950 averaging about $150 million a year of new loans; the Bank had been feeling its way. From 1950 to 1954 the average was closer to $300 million. For the next three years it became $400 million. Then there was a notable breakthrough with a sudden climb to a lending rate of almost $700 million a year, a rate which persisted from 1957 to 1961. Then, in our last fiscal year, the rate of lending rose to $882 million. It is too early to know whether this rate is a new plateau. For reasons which I shall mention later, I am inclined to think that this was an exceptional year and that the Bank cannot look forward to maintaining such a figure as an annual rate.

The Bank's first loans for development, and the first operations in which I had a part, were made in Chile in March 1948. We lent $13.5 million for hydroelectric development and $2.5 million for the purchase of agricultural machinery. Then in the following year we were able to extend our development lending, still in Latin America, with loans to Mexico and Brazil for power and to Colombia for agricultural machinery. In that year we also made our first loan to India for railroads, and began a long association with Finland by lending $12.5 million for her electric power stations and wood processing industries. I may say at this point that the association with all those countries, which was begun in those early years, has since continued and grown. Our loans to Chile, Mexico, Brazil and Colombia now aggregate the equivalent of more than a billion dollars. Our lending for Indian railroads alone is almost $400 million out of a total lent to India of over $800 million. Our lending to Finland is now over $150 million. These figures are evidence of the close link between the World Bank's lending and the economic growth of its member countries, and of the closeness of the relationship which has grown up between us in the past 15 years.

But we continued to be faced with problems arising from the need of our member countries for economic skills. In 1949 the Bank made a radical experiment with a mission to make a full-scale survey of the economic potential of a member country and a study of priorities which should be observed in the programming of its development. This first mission was to Colombia, and it laid the foundations for much of Colombia's subsequent development. The technique of the economic survey mission proved so valuable that it has become a regular and important part of the Bank's work. Up to now, we have sent similar missions, at the request of member governments, to more than a score of countries. The most recent have covered such varied economies as Thailand, Libya, Venezuela, Kenya and Spain. In every case, the recommendations of the mission have been of value and importance to development programming in the country concerned and have also greatly influenced the pattern of the Bank's own operations there.

By 1952, our technical assistance work had already become so important that, in that year, we set up a separate Department of Technical Assistance under a Director. It has continued to grow. This year we have recognized the increasing complexity of this side of our work by absorbing it in a new Development Services Department, which is responsible not only for our technical assistance activities, including the Economic Development Institute (the Bank's staff college in development programming) but also for the organization and oversight of a new instrumentality, the Development Advisory Service, which aims to offer full-time careers to the kind of experts who can be sent to member countries to advise governments on the direction of their development efforts.

I often think that the loans of the Bank, impressively large as they are, are only the small part of the iceberg which shows above the surface. Probably most of the efforts of the staff of the Bank are devoted to giving expert assistance of one kind or another to our member governments in their development problems.

In April 1951, 1 changed my job at the Bank to become Assistant to the President, Mr. Eugene R. Black. I then found myself engaged in new fields. Perhaps the most important task which fell on Mr. Black's shoulders in his early years as President was to establish the Bank's credit as a borrower in the world's investment markets, and particularly in the United States. The Bank's financial structure is such that the subscriptions of its member countries to the capital stock of the Bank could only play a diminishing part as the Bank's lending grew. The Bank was certain to become increasingly dependent on funds raised by the sale of Bank bonds to private investors.

A first sale of $250 million of Bank bonds had been made in the United States market in July 1947, and this was followed by other issues in fairly rapid succession. Mr. Black's attention was taken up to a great extent by the need to persuade the American investor of the Bank's quality as a borrower, and by the need to promote legislation in many of the states of the United States to amend existing laws so as to enable certain important institutional investors to purchase Bank securities. Mr. Black's success in this endeavour has been remarkable. Moreover, through his efforts, the Bank has successfully penetrated many other markets in the past 15 years-notably in Canada and in Western Europe. The Bank's outstanding funded debt is now more than $2,500 million, denominated in half-a-dozen currencies, and over half of its bonds and notes are now held by investors outside the United States.

This account of the establishment of the Bank's credit in the world's capital markets is done less than justice by such a brief mention as this, but time forbids any more lengthy examination of this supremely important aspect of the Bank's affairs.

Another new field for me, and also for the Bank, was that of mediation in economic disputes between our member countries. The first such venture was not successful. We tried to bring about a sort of holding operation which would enable oil production to continue in Iran until a settlement could be reached of the quarrel between the Mossadegh Government and the Anglo-Iranian Oil Company. We were unable to make any impact on that situation, or on Dr. Mossadegh. But the next job that came along did culminate in success, although it took a long time-about eight years. I refer to the Indus waters dispute between India and Pakistan.

This dispute had its roots, of course, in the political settlement for the partition of the Indian sub-continent. The new international frontier cut clean across the rivers of the Indus system, all supplying extensive areas with irrigation, leaving India the upstream riparian and Pakistan downstream on every one of the rivers.

India made it clear that she did not intend that Pakistan should continue to look to all these six rivers for her irrigation needs, either present or future. Pakistan felt that her whole agricultural economy, present and future, was threatened. Border clashes took place when Pakistan suspected that India was withholding water, and all the elements of more violent explosion were present-even all-out war.

The Bank felt that the worsening, and even the continuation, of such a state of tension between two of its most important countries could only inhibit the orderly course of their economic progress and accordingly, in 1952, Mr. Black offered the good offices of the Bank to mediate the dispute. Both governments agreed and thus began the process of negotiation which culminated in the signing of the Indus Waters Treaty at Karachi in September, 1960.

A vital element in the settlement was the generous financial contribution of six friendly governments (of which the Canadian Government was one) towards the cost of constructing a system of works in Pakistan to enable Pakistan to look forward to a reasonable quantum of water uses under the new regime of the rivers that the Treaty had established.

The Bank has also been used as an impartial mediator in the settlement of other disputes, in some of which I found myself playing a part. One of the most difficult of these was between the United Arab Republic and the Suez Canal Company over the question of compensation for the nationalization of the Canal. This dispute was successfully settled in July 1958 after lengthy and complicated negotiationscarried on in three languages. Then there was the other vexatious issue arising out of the Suez incident-the financial claims and counter-claims on one another by the Government of the United Kingdom and the Government of the United Arab Republic. This also Mr. Black was able to assist in settling on lines accepted by both sides.

All of the activities I have spoken of were possible within the framework of the World Bank itself. We were, however, also faced with some problems in development financing which the Bank's constitution had not equipped it to solve. One of these was the assistance of private industrial enterprises in our member countries. The Bank has, of course, made several loans to private industrial corporations, notably the big steel companies in India and Japan. But such Bank loans require a government guarantee, which is not always obtainable from the government, or indeed always acceptable to the private corporation. Moreover, the Bank's participation in these enterprises can only be in the form of loan capital, and private industry often requires finance in the form of equity participation, sharing the risks of the enterprise. Accordingly, the Bank took a full part in promoting proposals for the formation of a new international financial institution which would be devoted entirely to the promotion of private enterprise. This institution, the International Finance Corporation, or IFC, came into being in 1956 as an affiliate of the Bank.

The President of the Bank is also the President of IFC, and our operations are closely coordinated. True, IFC's earlier years were handicapped by a provision in its Articles of Agreement which prevented it from direct equity participation in the enterprises it wished to assist. This limitation was, however, removed a year ago and IFC has since demonstrated that much greater possibilities now lie before it in the field of industrial financing. IFC will have much to do with industrial development banks in the developing countries of the world, and we have recognized this by making IFC the focal point for development bank financing, even in cases where a World Bank loan will be involved.

But there is another and much larger international financing problem, which is bound to be increasingly with us in the future; it has arisen because of the growing pace of world development. Since the war, the less developed countries have been borrowing abroad on private and public account as fast as they could to finance economic growth. As a result, many of them have now reached, or are reaching, the limit up to which they can prudently borrow on conventional repayment terms, and at conventional rates of interest. A larger and larger proportion of their export earnings now and over the years to come are mortgaged to meet annual debt service payments.

One obvious example is India, where the financing of successive Five-Year Plans has led to a sixfold increase in India's external debt since 1955-and these large investments have not yet had time to produce their full dividends in terms of production. But India is far from alone in this situation; many countries of Latin America, for example, are in the same position.

Then there is another category of countries which are unable to borrow on conventional terms all the development funds that they need. These are the many new nations now emerging from colonial status. In the past, their requirements for external capital have been satisfied directly by the metropolitan power, or by their borrowing with the backing of the credit of the metropolitan power. The achievement of independence has removed this credit umbrella and many of these new nations will be hard put to find sources of external finance to continue their development effort.

This situation has become increasingly urgent in the past few years and is bound to become even more acute. A recent study made by the Bank indicated that a group of 34 less developed countries accounting for 70% of the population of the under-developed free world had increased their external public debt by about 21/a times in the last five years, while their export earnings had risen by only 15%. It is clear that in such a situation there are narrow limits to further conventional borrowing.

On the other hand, if external assistance to those countries ceased, their economic development would come haltingly to a stop, with grim consequences for world trade and for world political tranquility. What is needed to protect existing investments in those countries and to allow them to maintain the momentum of their economic growth, is more external assistance on terms which will not impose any significant additional burden on their already difficult balance of payments situation.

The first recognition at an international level of these new circumstances was the creation, two years ago, of the International Development Association (IDA). IDA too was established as an affiliate of the Bank, and its member governments subscribed initial resources for its operations equivalent to about $1 billion, of which 75% is available in convertible form. IDA has now lent a total of about $335 million. By and large, IDA credits are applied to purposes similar to those for which the World Bank lends, although IDA is also lending for social investments such as municipal water supply and secondary education.

But the terms of IDA credits are very different from those of Bank loans. Bank loans at present carry an interest rate of 51/a % and are usually repayable over 15 or 20 years. IDA credits may have a term of as long as 50 years, with no repayment over the first ten years. Moreover, IDA credits may be granted free of interest, with only a service charge of 3/a of 1 % to help meet administrative costs. As a result, a country receiving an IDA credit obtains foreign exchange assistance for its development investment without having to face debt service payments of any burdensome consequence.

IDA shares the same Board of Directors, the same management and the same staff as the World Bank. Projects submitted for IDA financing are subjected to the same rigorous investigation as is applied to World Bank loans. Thus, although IDA credits may be soft in their terms, they are certainly not soft-headed, or even soft-hearted. Moreover, IDA's funds are not passed on to an agency executing a project on the same lenient terms as they are provided by IDA to governments. We ensure that governments, when re-lending the funds to the project that is being financed, do so on conventional terms so that the project is subjected to the financial disciplines which assure its economic operation.

I would repeat that the Bank and IDA have a common Board of Directors, and it is this Board that decides when a country should have an IDA credit rather than a Bank loan. But so great is the need for external assistance on IDA terms that half of IDA's initial convertible resources have already been lent and the remaining half is likely to be committed within the next nine months. The financial future of IDA was the principal item of business before the Annual Meeting of the Board of Governors of the Bank and IDA in Washington a month ago. The Governors have instructed the Executive Directors of IDA to come up by the end of this year with proposals on the replenishment of IDA's resources. Naturally, what the Executive Directors will recommend will reflect the instructions they receive from the governments they represent. Accordingly, we may expect that the next few months will see lively debates in parliaments and congresses, particularly of the so-called industrialized or developed countries, on how much they are willing to contribute to IDA to enable its economic assistance activities to continue.

It seems to me that what is required is a firm decision by the "rich" countries that-year in, year out-in good years and in bad-they will be prepared to contribute a certain proportion of their national incomes-or, at least, a certain proportion of the growing increment of their national incomes-in financial assistance to those countries that are "poor"-and the "poor" countries contain the vast majority of humanity. If such a decision was taken, a much more rational use could be made of the world's available resources.I believe that there is no alternative to this decision if the free world is to achieve its economic and political objectives. Over the past 20 years, a programme of external aid has been a constant feature of Canadian policy. I am confident that when the issue of more funds for IDA comes before the Canadian Parliament, it will have the generous and sympathetic consideration that it certainly deserves.

I need not remind this audience of the success that has attended the efforts of ministers of finance, chancellors of the exchequer and secretaries of the treasury in bringing about a less inequitable distribution of national wealth among the inhabitants of their own countries. This has been the most significant politico-economic development of our generation. The gap between individual wealth and individual poverty in the so-called developed countries has constantly contracted.

I can recall the days of the beginning, almost sixty years ago, of such education as I have had, when I attended a small elementary school in the heart of the country in the north of Ireland. Of about forty children, the parents of only 8 or 10 of us could afford to fit us out with boots or shoes. The rest went barefoot, and often hungry. Returning to my native country-side today, I see no one undernourished, no one ill-clothed.

But now look away from the domestic scene to the international panorama. Between the countries that are "rich" and the countries that are "poor", the gap-already very, very wide-is not only not contracting, but is actually widening. In my view, this growing disparity in international wealth, this need to find means (within the framework of our democratic political institutions) to narrow this international gap, is the most urgent and challenging problem facing our own generation and the new generations to come.

THANKS OF THE MEETING were expressed by Mr. J. R. W. Wilby.

Powered by / Alimenté par VITA Toolkit




My favourites lets you save items you like, tag them and group them into collections for your own personal use. Viewing "My favourites" will open in a new tab. Login here or start a My favourites account.

thumbnail








Fifteen Years at the World Bank


A detailed and personal retrospective and history of the World Bank. A review of some of the major changes that have taken place in the world over the last 15 years, the paramount one being the population increase. The World Bank since 1948 when the speaker became Director of the Loan Department. His arrival coincident with the beginning of a period of transition for the World Bank. Many milestones in the development of the Bank. Figures and details of development loans. The Department of Technical Assistance, set up in 1952, with examples of its operation. The Bank's involvements in political negotiations and disputes, with examples. Problems with development financing. The International Finance Corporation as an affiliate of the Bank, set up in 1956. The growing pace of world developments and the problems that brings to the World Bank. The increasing inability of developing nations to keep up with payments. The establishment of the International Development Association (IDA). How the IDA and IDA credits work. The need for a firm decision by the "rich" countries to the "poor" countries. The widening gap between rich and poor. The need to find means to narrow this international gap as the most urgent and challenging problem facing this generation and new generations to come.