9. The start of a lending programme to India was generally welcomed as enhancing the Bank's role. However, the USA expressed concern about any significant expansion of lending to non-traditional borrowers in the present capital increase period. They believed the Bank's emphasis should continue to be on the traditional borrowers.
10.
Several non-regional countries, including the UK and the USA referred to
The USA indicated the importance of environmental issues in planning projects. their intention to put proposals to the Board of Directors on these questions.
Whilst there was general recognition of the need to prepare the necessary studies for the next general capital increase, the USA put down a marker that negotiations would probably be spun out because they believed new resources would not be needed before 1989 at the earliest or even 1990, particularly if lending to non-traditional borrowers such as India and, by implication, China was restrained.
12.
All non-regional countries welcomed what they considered to be the successful outcome of the AsDF V negotiations (separately reported) and stressed that it reflected a judgement amongst the donors of the Bank's capacity to ensure that the scarce concessional resources were well used. Some regional countries politely referred to the successful conclusion; but several others, including India, were disappointed that the Bank's original target of $5Bn had not been reached.
13. Non-regional countries, particularly the USA, stressed the importance of the policy issues discussed in the AsDF negotiations, especially the development of country strategies and policy dialogue, more involvement with the private sector, improved project quality, and possible slight hardening of terms (to follow what will be agreed in IDA). Indonesia, Sri Lanka and Bangladesh, in particular, took up the point that the country strategies and policy should not be used as a veiled form of cross-conditionality with. other lenders, or to impose ideological forms of support on developing member countries. They emphasized that this would be unproductive. It is clear that there will be a continuing lively discussion on these subjects in the Board of Directors.
14. Japan indicated that its share in the Bank's capital was well out of line with the burden it had been taking in the AsDF. This had worsened with the advent of new member countries and with the granting of special capital increases to 5 European countries last year. Japan would therefore be seeking an SCI to redress the balance. Germany also put down a marker for It relied an SCI to regain its relative position prior to the recent changes. on the argument that its capital market played an important role in the refinancing of the Bank's operations. Even France, which had an SCI last year, expressed an interest in another one. The USA emphatically opposed
a new round of SCIs and urged long and careful consideration of possible criteria.
15. Apart from the UK, Germany and Austria put in a bid for the second time zone office. The USA also supported the creation of such an office. It was clear from the interview with the President that he still opposes the idea, and will seek to delay Board consideration until after the next GCI.
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