Secretariat draft
21 June 1993
helping mitigate the risks run elsewhere.
6.18 Taking account of these factors, we propose that the target for
minmimum level of investment in poor countries should be set at about the
current performance. Thus CDC should have a target of making at least 70
per cent of new investments in IDA eligible countries (these are
listed at Annex 0).
6.19
Within this, CDC should consider concentrating its efforts in those
countries which are important in foreign and aid policy terms. And also
where it can most readily make a particular contribution in terms of its
role. We would therefore expect CDC to pay particular attention to
investment in poor countries which are seriously undertaking reforms but
where investor confidence remains low. Many of these countries are likely
to be in sub-Saharan Africa. However, proposals may be made from time to
time for including other poor countries in those where CDC may invest.
Proposals [are currently being considered] for permission to operate in
Vietnam.
6.20 We would also expect CDC over the next five years, to seek to
increase the amount of additional direct foreign investment which it brings
to particular countries, in association with or as a result of, its
demonstration and catalytic role. Its record in doing this will be an
important measure of performance.
6.21 We would expect performance against this target and the general way
in which resources were being deployed to be the subejct of a deepened
discussion of priorities and objectives each year between ODA and CDC. This
would among other things (without seeking to revise the formal target)
provide the opportunity to review the rationale for continued investment
in particular middle and higher income countries.
6.22
Subject to review in those discussions, we would expect the balance
of CDC investment mainly to go to higher income clients with particular
problems in accessing investment capital of the sort that CDC can provide.
This would include, to the extent they meet the criteria, the small, but
6
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