Everyone's Bank

In Caracas this week, the finance ministers of 20 Hemisphere nations will hear a report on one part of the Alliance for Progress that no one complains about. It is the Inter-American Development Bank, a sort of hemispheric version of the World Bank, founded three years ago in Washington and run ever since by Chile's Felipe Herrera, 40, an able and articulate economist. To give the bank its $1 billion capital, the U.S. subscribed $450 million; Latin American nations put up the rest, each giving according to its wealth. On top of this the bank also administers $394 million in Alliance for Progress funds. From the bank, both governments and private businessmen can get low-cost, long-term loans for the kind of projects that other international lenders rarely bother with.

So brisk is business that after two years of operation, the bank has spent the equivalent of almost half its original funds in 139 loans totaling $617.7 million. Some recent loans: $30 million to an Argentine government bank to finance a new 15,000-home project for low-income families.

-- $15 million to a Brazilian electric company to run more power into Brazil's industry-starved northeast bulge.

> $4,000,000 to Honduras' development bank to be relent to livestock farmers for buying cattle, pastures, corrals and dairy equipment.

> $2,800,000 to a group of Costa Rican businessmen who are building the country's first cement plant.

> $16 million to Mexico's national development agency to expand municipal water systems in the Yucatan Peninsula and irrigate 53,000 acres of farmland in arid central and western sections.

To keep up with the demand, the bank is already looking for more money. Herrera hopes to persuade the bank's members to increase their antes, and double his authorized capital to $2.3 billion. This way, the bank would have the reserves to expand its activity in the bond market. Last year the bank raised nearly $100 million on two bond issues sold in the U.S. and Europe. Normally, the market for Latin American bonds is dyspeptic, but the two Inter-American Bank issues were oversubscribed at a premium.

This file is automatically generated by a robot program, so reader's discretion is required.