STRICTLY CONFIDENTIAL
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Washington, D.C.
Tuesday, March 29, 1966
A meeting of the Executive Directors of the Inter-
national Bank for Reconstruction and Development was convened
at 10:33 o'clock, A.M. in the Board Room, 1818 H Street,
Northwest, Mr. George D. Woods, President, presiding.


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STRICTL)' CONFIDENTIAL
MR. WOOW:
e r, c m e n
r t                 'r i c  i h   r
e d i n  c ern  r        the GeneriL Assemb!,,,ý  the United
lat'101-ls  a't,                         11r,ýw  Yýý,r',
t I  c i r c 1,ý t e     e          r'-  r


STRICTL) CONFIDENTIAL                                                  62
came to you within the past three or four d:ys. The
resolution, among~ other things, call upon the specal izd
gencies of the United Nations to refrain -r                 e la
or technical assistace to these two countries, th is,
Portugal and South Africa, so long as they continue their
present African policies. In the resolution on Por      a, the
An Agreement entered into in 947 between the n
and the United Nations deals with relations between the two
institutions. The Agreement permits the organs of the United
Nations, after reasonabie prior consultation, to present
formal recommendations to th#k which must be considered by
the competent organs of the Bank. There were no such consulta-
ticns on the matters ir question. Furthermore, in the Agree-
ment, the United Nations recognizes that by reason of the
nature of its international responsibilities and the terms of
its Articles of Agreement, the Bank is, and is required to
function as, an independent international rganization.
Finally, the United Nations recognizes in the Agreement that
the action to be taken by the Bank on any loan is a matter to
be determined by the independent exercise of the Bank's
own judgment in accordance with the Bank's Articles    f Agreemt
and therefore agrees that it would be sound policy to refrain.
from making recommendations to the Bank with respect to


STRICTLY CONFIDENTIAL                                                    63
particu lar .. :. ur t::. terrr or   n i    :  of financing by th
Ban k.
Tnhe Bnk' Art ie    pr ovid  tant the Bank rnd its
officers  : 1. nDt interfere in the political afirs          any
m emer a-nd tnat thy shall      t be innitflece    n their dceir sns
y the poi tical   iaracter of the member är m       remb r  nc erned.
Only eco iDr.n   cons, derionv  re to b e relvint to their
de isions.  Thereore, i propose to treat rque,2 ir 1 r     a
-rom these c 'unres, Portugl and 'out       ll'rlc, in the
Smanner ais   ppic-ations frm 3ther :.e"`)ers.    Lan negotia- *
tions will Le opened short y    nd, vf l     oes well, I expe
Spreset     you within a    _,onth or two nropsr
o t  P o rtu ue,e  i wower  mtolL' whichw     he been leni n
dur ng the   as t three year. W e asIr  h. e inier           2 ntid erai n
a loan to ite    , ect rei iy Supp y Comi.S-in in L outh i`rica
t  wc     e ihiav2 lent on several occas nis In te pa6.   e
expect tn send a missio is .-)n1n- rea r fu ture to  ppra ise the
pr o ject in        r u  ca
I an aware tha   t     .   · :. 1n Afrinn -uld
affect the econoi -develop'ment, foreign trade ard fina:         o-
FqrtugaL and Somth b frica. It will theref-ore he necessary
Ln rev1ewing the ernnomic p,ositin and pro-pectS of these
eountries to tk-e account o. the situio n ns lt develops.
Tha t'S t11-he statement 1 wiched to make, gentlemen, anr


STRICTL) CONFIDENTIAL                                           64
it wi I be available to the Directors later today.
Are there any questions or any comment any Director
:oiud care to make?
Mr. Kochman.
MR. KOCHMAN: I wanted to know if this statement
will be distributed, but you stated it would.
MR. WOODS: Anyone else?
Dr. Mja
DR. MEJiA-PALACIO: I fully support your statement,
Mr. Chairman, because I think this 1s the right thing to do.
We cannot get involved in politics and we have to be out
of these questions and not be influenced by other organs
of the United Nation:.
MR. OODS: Thank you, Dr. Mejia.
Anyone else?
If not, I'd like to say gentlemen that on Thursday,
March 31st, day after tomorrow we are scheduling a meeting
o the Executive Directors of the Bank at 10:00 o'clock,
if you'll note -- 10:00 o'clock. We have a rather full affair,
and I think if we can we should start promptly at 10:00, to
consider a proposed loan to Paraguay for roads and a meeting
also of the Executive Directors of IDA to consider a credit to
Paraguay for a livestock project.
The Bank meeting wil1 be followed by an I Board


STRICTL     CONFIDENTIAL
meeting to ccnslder an investment in Morocco. Furthermore,
on Thursday, the 31st of March there will be a meeting of the
1ank and IFC financial policy committees, a joint meeting
ofite fiacal policy committees of the two institutions,
for the purpose of diocussing the report regarding Bank loans
to IFC.
These are documents F?" 66-1 on the Bank side and
pc 66-1 on IFC. Thursday we hope to   et to those matters.
If thereis no further Bank business, I propose
tc adjourn this meeting and proceed with IDA with Mr. Knapp
in the chair.
Is there any further Bank business?
Mr. Knapp will. take over for the IDA meeting. I
am committed to go to a luncheon to Mrs. Gandhi, which, for
a combination o  reasons, I can't be late at, so if you will
forgive me, Mr. Knapp will proceed.
Thank you very much.
(Whereupon, at 12:30 P.M. the meeting was adjourned,
followed immediately thereafter by a meeting of the Executive
Directors of IDA.)