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

The Bank, which had received the loan application on Oecember 1, 1972 and the basic project studies on January 2, 1973, sent a field mission to Chile in May 1973 lor lurther . discussions. On July 26, 1973, a Bank Project Committee reported lavorably on the hydroelectric project Ouring the courSe 01 ensuing negotiations, the Chilean Government on August 28 reques– ted that the original amount 01 the loan application be increased. The proposal was being processed in a normal lashion when the Allende Government lel!. On Oecember 9, 1971, an ordinary capital loan, approved in 1969 as an industrial global credit lo CORFO, was modilied subslantially under an Executive Board resolution appro– ved by majoríty vote. The loan was designed to promote mainly the development 01 private enterprises in Chile. The original loan contract allowed CORFO the use 01 only up to 10 percent 01 th'e amount to extend subloans to corporations in which it held capital stock. Thus, the enterprises in which the new Government was most interested -those in which CORFO became the principal owner belore or during the Allende Administration- had virtually no access to the loan. The loan contract was modified in 1971 under the abovementioned resolution to authorize CORFO to .use up to 49 percent, instead of 10 percent, 01 the total amount 01 the credit -$7,200,000; 10,048,000 Deutsche Mark, aM 1,250,000,000 Italian lire- to extend su– bloans lor expanding CORFO-owned industrial enterprises. By June 30,1973, the resources 01 the global loan had been committed for linancing 39 industrial projects calling lor a total investment equivalent to $54.2 million. 01 Ihal amounl, $13.1 million are being financed through the Bank loan, with $6.4 million (49 percenl) assigned lo CORFO affiliates and $6.7 million (51 percent) to private enlerprises. The Bank has also helped lo linance capital goods exports to Chile Irom other member countries. For instance, Argentina, whose revolving line of credit lor export financing lrom the IOB was enlarged on November3, 1971 from $3 million to$4 mili ion, was able to linance the export to Chile 01 more than $4 mili ion worth of breeding cattle. On January 9, 1973, the Bank authorized a specialline of credit to Peru lor $980,000 to linance the export to Chile of commercial lishing equipment. At the 13th Meeting 01 the Board 01 Governors, in Quito, the Government of Chile invited the IOB to hold its next meeting -Board members are Ihe Ministers 01 Finance ollhe respective members countries-in Santiago. ButJamaica had also invited the Bankto hold the meeting in Kingston, and the two Governments agreed that Chile would yield. The meeting, there– lore, was held in Kingston in May 1973. At the Kingston Meeting, the Board 01 Governors, on a proposal by Jamaica, adopted a resolution naming Santiago as the sjte for Ihe 15th meeting in April 1974. The Chilean Government approached the Bank in February 1974 lor emergency assistance to agriculture. The Bank, taking into account the serious agricultural situation in Chile, processed the loan as rapidly as possible and, on March 30, the Board unanimously authorized a $22,000,000 loan for a program 01 guided capital ization credit for agricultural recovery. Chile itsell will participate in this program with an equivalent amount. The principal beneficiaries 01 the loan are small and intermediate agricultural producers and cooperatives. On April18, the Board authorized a $75.3 million loan for the Antuco hydroelectric project mentioned above, which had been presented to the Bank in Oecember 1972. 152