Good Risk

World Bank President Eugene Black thought it was time for a celebration. Ignoring the rule against liquor in the bank's Washington headquarters, he broke out carafes of sherry and poured glasses for sariclad Vijaya Lakshmi Pandit, ambassador from India, and friends. Madame Pandit had just signed up for a $34 million World Bank loan, the first such loan to any country in Asia. Glowed President Black: "It is [also] the first occasion that the bank has had the happy privilege of entering into a contract executed by a lady."

Both sides had reason to be pleased. From the World Bank's standpoint, India is a good risk: it has never defaulted on a loan. At the same time, India desperately needs dollars. Since World War II, though it has been able to produce plenty of raw materials (e.g., mica, magnesium, iron ore), India has had trouble transporting them over rundown railways to factories and seaports. With the $34 million, India will buy U.S. and Canadian rail equipment and start rebuilding the transport system.

With the first loan out. of the way, Madame Pandit was ready to sign up for a second loan. India needs an additional $41 million to build a public power development, and to buy agricultural machinery to clear weed-infested land and step up food production.*

India did not plan to live on international loans alone. The government was pushing a $4 million program of industrial research for new Indian products, and hoped to attract private investment capital from the U.S. But until laborite Prime Minister Nehru, Madame Pandit's brother, takes a positive stand against the nationalization of industries, few U.S. businessmen are likely to invest in India.

* To step up food output in another part of the world, the World Bank last week granted Colombia a $5,000,000 loan for the purchase of farm equipment.

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