Thursday, April 26, 1973
"I am in general agreement with these criteria," he said.
He also accepted that "there are varying degrees of need among
the region's developing countries"
that some must take priority over
others for borrowing on concessional terms.
However, he hoped that the concept of country priorities wil
not be allowed to colour the Bank's policy in respect of its ordinary leading operations."
Essentially, he went on, the Bank's ordinary and Special Fund operations were separate. Non-eligibility for Special Fund loans should not necessarily bean non-eligibility to borrow on commercial terms at
normal rates of interest.
Judgment
Mr. Chan expressed the hope that in considering applications for loans from ordinary capital resources, the Bank would not base its judgment wholly on the existence or otherwise of a "resource gap". Instead, he hoped that the Bank would take into account "such normal commercial banking considerations as the applicant's credit worthiness and the worthiness of the project."
It need hardly be pointed out, he added, that "an ability to invest excess liquidity in the short term, and from time to time, does not necessarily mean that there is no need for medium or long-term borrowing."
Commenting on the Bank's policy of aiming at the early achievement
of equality in the shares of ordinary and Special Fund loans in its total lending operations, Mr. Chan said the desire to accelerate the economic and social development of the region was "highly laudable."
/"But we