Worldwide economic recovery has been slower than was expected a year ago, largely because of "the disappointing behavior of capital investment," according to the annual report of the International Finance Corp., published yesterday.
The IFC is the World Bank affiliate set up to assist poorer member nations by promoting the growth of the private sector of their economies.
In the year ending June 30, the IFC approved investments totaling $258.9 million in 20 different countries a fractional increase over the previous year.
The report said that a more vigorous recovery depends on strengthening confidence in the business and financial community and that this in part depends on greater cooperation between international financial institutions and the private banking system. It called for "co-financing and other mechanisms" to increase the flow of resources for productive investment.
Greater "cooperation and understanding " between the developed and developing worlds are also crucial the IFC report said. "The continued economic progress of many developing countries is critically dependent upon the availability of foreign technology and skills, and also increasingly upon access to foreign markets for their exports," the report said.
"If these input are to be available however, those who provide them must be equitably treated and suitably rewarded. A secure environment is necessary to stimulate investment," the report added.
The questions of closer cooperation between international lending institutions and the private banking system, as well as rich country-poor country relationships will be on the agenda of the annual meetings of the World Bank group and the International Monetary Fund, beginning here on Sept. 25.