Chile: the balanced view : a recopilation of articles about the Allende years and after

when he charged that the World Bank had suspended lending to Chile because 01 ils exproprialion 01 loreign investments. The Bank does have policy guidelines which govern lending to countries which have nationalized loreign-owned firms, he said. In Ihe Chilean case, however, exproprialion was nol a lactor in the Bank's decision nol to lend lo that country since the Chilean economy was in sufficiently bad shape that Chile was not credit-worthy and did not merit loans in the first place. "The question had not yet arisen as lO whether or not Chile had acted in accordance with that IBank) policy because the primary conditions 01 Bank lending -a soundly managed economy with a clear potential lor utilizing additional lunds efficiently- had not been met," he stated. Until the Chilean government took the proper internal measure to deleat inllation and to restore domestic economic stability, McNamara concluded, no amount of external aid could remedy Chile's economic problems.(18) IOB P~esidenl Antonio Ortiz Mena did not respond during the IOB 1972 annual meeting lo Sr. Zorrilla's changes that the Bank had terminated its lending to Chile lor polítical reasons.(19) The office 01 the U.S. executive director at the IOB indicates that the Bank never issued any official statement regarding Ihe issue because il does not believe that there ever was a cesation of IOB lending to Chile. Rather, the Bank contends that several loan proposals lor Chile were in its pipeline during the 1971-1973 period, and il any had matured they would have been considered by the Board of Execulive Oirectors. AII 01 the proposals lor Chile developed time-consuming problems, the source indicates, and none was sufficiently well prepared during this period lor Loan Committee or Board considera– tion, The issue is clear: did the multilateral banks politicize their loan operations and terminate Chile's credit after Sr. Allende became president because 01 subservience to U.S, loreign polícy needs and disagreement with Chile's domeslic economic reorganiza– tion policíes, or did the institutions evaluate Chile's credit-worthiness solely in terms 01 the performance 01 the Chilean economy and the specilic characteristics 01 loan proposals put before them? Unlortunalely, it is easier to ask than to answer this question, The multilateral development banks are international institutions, exempt by law and treaty Irom the normal methods 01 congressional inquiry.(20) It is therelore not possible to evaluate their activities through the systematic analysis of their internal records and the comprehensive intervie– witlg of bank staft personnel. Among other exemptions and immunities, officers 01 the organizations are granted immunity from su it and legal process related to acts perlormed in their official capacities as officers, representatives or employees 01 the banks. Al! bank charters explicity state that the archives 01 the institutions shall be inviolable and that official communications 01 the banks shall be accorded by each member t-he same treat– ment il accords to official communications 01 other sovereign states. Because 01 these information problems this paper is necessarily based on an analysis of Chile through an assessment 01 the external activities 01 the banks rather than through a study 01 their internal papers. By examining the response 01 the multilateral development banks to changes in Chilean economic conditions during the past decade, it is possible to see whether the banks remained relatively consistent in their treatment 01 Chile or whether marked shifts in their behavior during the Allende period signal the possibility 01 politically-motivated discrimination.(21) (18)ECOSOC, Resumed Fifty-third Sessíon, pp. 25-26. (19)lbíd. His remarks are found on pp. 35-53. 115-116, and 115-165. (20)The Internatíonal Organizatíons Immuníty Act. Public Law 79-291, as amended by Public Law 89-353; 59 Stal. 669; 22 U.S.C.. 288 et seq.): IBRO agreement signed Oec. 27,1945, authorized by Bretton woods Agreement Act (59 Stal. 512-517. 22 U.S.C., 286 et seq.): IFC agreement signed May 25, 1955, authorized by International Finance Corporatíon Act (69 Stal. 669, 22 U.S.C., 288 el seq.): IOB agreement signed in April 1959, authorized by the Inter-American Oevelopment Bank Act (73 Stat. 299,22 U.S.C., 283 el seq.): IDA agreement (74 Stal. 293: 22 US.C., 284 el seq.): AOB agreement signed Dec. 4, 1965, authorized by the Asian Oevelopment Bank Act (80 Stal. 73: 22 U.S.C., 285 el seq.). . (21)Some 01 Ihe material lor this paper has been drawn Irom documents prepared by international ínstitutions. A good body 01 Ihis material consists 01 Internal documents and studies, made available on a non-attrlbution basis by 126