World Bank President Barber B. Conable today announced agreement by the Bank's Board of Directors on proposals for a $74.8 billion General Capital Increase.
"These agreements pave the way for stronger World Bank support for the developing countries," said Mr. Conable. He added that "this is an excellent result underlining the confidence of our shareholder governments in the Bank."
The proposals agreed by the Executive Directors will take the Bank's authorized capital to $171 billion. The proposals include:
-A General Capital Increase of $74.8 billion.
-New subscriptions for this increase will be 3 percent paid-in and 97 percent callable.
-New shares equaling one percent of total authorized capital, $1.7 billion, will be set aside for new membership applications.
Procedures: The agreements will be sent to the World Bank's Board of Governors (consisting of a senior official from each of the 151-member governments) for formal approval. The Governors have been asked to vote by April 30, 1988. The agreements envisage member governments subscribing over a five-year period and completing their new capital subscriptions by September 30, 1993. Mr. Conable expressed the hope today that "governments will act with urgency on the capital increase so that we can press ahead to provide expanded support to developing countries."
Background: This would be the World Bank's third General Capital Increase. The first, a 100 percent boost, was approved in 1959. The second, approved in 1980, totaled $40 billion and virtually doubled the Bank's authorized capital. (There have also been selective capital increases from time to time.) The callable portion of subscriptions can be demanded by the Bank from subscribing governments only if needed to meet obligations on its borrowings or guarantees. The Bank has never made a call on this portion.
Lending: The Bank's lending reached a record level of $14.2 billion in its last fiscal year that ended on June 30, 1987. Mr. Conable noted that "with an expanded capital base we will have the capacity to steadily increase our lending over the next five to six years, to over $20 billion per year in the early 1990s."
