"Our Bank"

In Washington's alphabet soup, the Inter-American Development Bank is known by its initials IDB. Latin Americans call it el BID, or simply "our bank," and it is one part of the Alianza that no one complains about. Latin Americans had the original idea, have their own man in charge, and put up more than half of the initial $813 million capital. At the bank's annual meeting in Panama City last week, hemisphere finance ministers could count the impressive results: by the end of 1963, el BID had authorized no fewer than 192 development loans totaling $875 million in 19 capital-short Latin American member countries. So far this year, the bank has extended another $88 million in loans.

For Power & Homes. The bank was set up in 1960 to step in where private banks and other international lending institutions feared to tread. Under its able and imaginative president, Felipe Herrera, 41, a Chilean economist, el BID has granted longterm, low-interest loans for hydroelectric power in such marginal-risk areas as Guatemala and Paraguay. About 35% of its loans are for agricultural projects, which often get a cool reception from international bankers. Last year the Mexican government received $30.5 million to reclaim and settle 130,000 desolate acres in the southeastern state of Tabasco, while Venezuela and the Dominican Republic got $6,000,000 apiece to build up cattle herds.

Another of Latin America's major problems is private business capital; money is short and local interest rates range up to 18% annually. The bank has loaned $300 million to businessmen around the hemisphere, and at rates of less than 6%. In Peru, a private company recently got a $1,400,000 loan to begin transforming 16,000 desert acres into farmland. Other loans have gone for a synthetic rubber plant in Brazil, a wood pulp mill in Colombia, fruit processing in Argentina, textile mill expansion in Paraguay, and plants to process timber into chip board for construction in Chile and Argentina.

Most of a $6,000,000 loan to the Central American Bank for Economic Integration, an arm of the five-nation common market, will be reloaned to new industries. To top it off, $283 million in "social progress" loans to 17 countries have resulted in 210,000 low-income housing units, and the construction or expansion of water and sewage systems in 1,115 cities and villages.

Bonds of Gold. So far, the vast majority of repayments are right on schedule, and the bank has established such a gilt-edged reputation among world bankers that two recent bond issues were oversubscribed. Moreover, the U.S. has added another $411.8 million to its original $350 million subscription, and other members have agreed to increases bringing el BID's total capital to $2.1 billion.

At the Panama meeting last week, President Herrera was unanimously elected to a second five-year term. "Our institution must continue to demonstrate that, being a bank, it is also more than a bank," he said. "Therefore, we must expand our operations to respond to the needs of our national masses." The U.S. obviously agrees. Secretary of the Treasury Douglas Dillon brought to the meeting a U.S. offer of yet another $750 million in Alianza funds for el BID over the next three years.