WORLD BANK: Cautious Welcome for Ida

For one week, India’s parched capital of Delhi (pop. 1,800,000) manfully put on the air of a Chicago at convention time. So jammed were the city’s 1,850 hotel rooms that one enterprising manager converted 50 singles into doubles by adding divans that one newspaper described as “apparently designed for dwarfs.” Delhi’s barmen, in need of practice after two years of prohibition, suddenly found themselves back in business —but only for one week, and to serve only those who wore the magic silver lotus lapel badge. Those who wore it were the 1,000-odd delegates and guests at the 13th annual meeting of the International Bank for Reconstruction and Development (World Bank) and the International Monetary Fund (IMF), gathered in the air-conditioned comfort of Delhi’s modern House of Science.

Giant Unleashed. But the delegates from 68 nations, comprising a Who’s Who of international banking and finance, had only to stray a few steps beyond this facade to see nagging reminders of that other India—the India of bullock-drawn carts, and hovels and beggars, the teeming, tumultuous India of grinding poverty that has become the Bank’s biggest customer. India’s Prime Minister Jawaharlal Nehru warned the delegates on opening day: “The changes of the last few years have unleashed a giant. Asia does not want to continue as a starving continent living on the verge of subsistence.” The giant, said Nehru, had been kept down for 150 years. “Tremendous urges are coming up. These needs are there and are justified. Who are we to criticize if people want better food, better clothing or better living conditions? All of you want them to have these.”

In Nehru’s opinion, the “major division of the world today” is that between the developed and the underdeveloped communities, and the fact is that, comparatively, the poorer nations are getting poorer, and the gap between have and have-not is widening. “Whether you talk of a Communist state like the Soviet Union, which has become an industrialized state, or of many non-Communist states that are highly industrialized, in the final analysis they worship the same go(js—the god of industrialization, the god of the machine,” and it was up to those present to help solve the economic problems of Asia, because “if we don’t, somebody else will.”

Ike’s Proposals. Then the bankers took over—men by no means indifferent to Nehru’s appeal, but aware of other necessities too. Bearing a letter from President Eisenhower urging help to the impoverished giants of all continents, U.S. Treasury Secretary Robert Anderson proposed that member countries increase their contributions to both the World Bank, which lends money to its members at regular bankers’ rates, and to the IMF, whose funds are available to shore up sagging national currencies in an emergency. Backing Ike’s suggestions, the boards of governors of both Bank and Fund agreed unanimously to boost the contributions of all members. There was talk of doubling the Bank’s $9.4 billion capitalization (increasing the U.S. contribution to more than $6 billion) and of a 50% increase in the IMF (the projected U.S. share: $4.1 billion).

But there was less hurry about the third of Ike’s suggestions—the possible creation of an International Development Association (IDA) that would lend money to countries on easy rates for long terms. Under Ida, as the British call it, leans would be repayable in “soft” national currencies rather than in such “hard” currencies as the U.S. dollar and the Deutsche Mark, as the World Bank requires. The U.S. itself did not push very hard for Ida, a plan originally suggested by Oklahoma’s Democratic Senator Mike Monroney. It got a warmer welcome among the underdeveloped countries that would do the borrowing than the industrial nations that would do the lending; it appealed to the diplomats present more than to the bankers, who fear that it may encourage negligent financial tendencies in poorer nations. Ida is still in the limbo of “study.”

Haves & Have-Nots. The assembled financial experts found themselves in general agreement that, with the U.S. recession ending, the outlook for world trade, balance of payments and healthier economies is rosy. They noted that U.S. imports had stayed high during the recession, and were pleased by the resiliency that the free economies of the world have shown.

They were agreed that the World Bank, born 14 years ago at Bretton Woods, N.H., had played a vital role.

From avuncular World Bank President Eugene Black of the U.S. came a final reminder to the have-nots of the world that they could expect little sympathy—or help—if they failed to perform the unpleasant and unpopular duty of putting their own financial houses in order, or if they tried an “appeal to sentiment or exploitation of a strategic position in the international political lineup.” But Black urged action by the haves on the “imaginative and constructive” U.S. proposal for Ida. “There is a real need,” said Black—and the delegates had to look no farther than the side streets of Delhi to see it.