Besides their own savings, the developing countries must rely to a considerable extent on foreign sources of capital for financing their development. The World Bank Group channels a small (10%), but increasing, share of these capital transfers through either the Group’s main organisation, the International Bank for Reconstruction and Development (I.B.R.D.), or its two affiliates, the International Development Association (I.D.A.), and the International Finance Corporation (I.F.C.). The Group obtains its operating funds from private and governmental sources and commits them under widely varying conditions. Annual commitments have trebled during the last decade, reaching $2,300 million in the financial year 1970. Actual disbursements average about $1,000 million per year.
The developing world’s heavy dependence on agriculture is reflected by the emphasis which loans for agriculture receive, and these involve both import substituting and export expanding types of projects. About one-fifth of all I.B.R.D./I.D.A. commitments are for agricultural projects and an additional important share of
I.F.C.’s investment is in the fertiliser and food processing industries. Through its capital subscription, bond purchases and as a source for I.D.A. funds, the U.K. plays a considerable financial role in the Group’s activities. Against this outflow of funds, however, stand the orders obtained by British industry and consulting firms for the supply of goods and services to Bank-financed projects.