World Bank loan commitments have been accelerating in the past few months, and officials now expect them to total about $11.3 billion for the fiscal year ending June 30. The amount represents a decline from $11.9 billion in fiscal 1984, but would be more than anticipated only a few months ago.
In late December, World Bank President A. W. Clausen stunned the bank's executive board with a report showing a dramatic drop in new loan commitments. In contrast to a prediction made at the 1984 annual meeting that commitments would run between $12.6 billion and $13.3 billion in fiscal 1985, Clausen's forecast dropped $2 billion, to a range of $10.5 billion to $11.5 billion.
The projected decline was attributed to economic stress in many developing countries, which left them unable to supply counterpart funds for projects that the bank had approved. In other cases, the bank's own stringent tests of the creditworthiness of prospective borrowers forced the postponement of loan commitments.
But recently, bank officials have noted a pickup in activity, which they attribute to a gradual recovery from recession in the Third World and the increasing ability of some political leaders to make financial reforms to qualify their countries for loans that had been pending.
"We haven't sacrificed any of our lending standards," one World Bank official said.
However, the dramatic fall-off from the original forecast for this year of between $12.6 billion and $13.3 billion has left the bank somewhat gun-shy on making new year-to-year projections. "We're more cautious now," a bank source said. "Perhaps we won't enjoy the regular year-to-year increases in activity that we used to see."
Nonetheless, Clausen and other officials reportedly expect that the bank will make at least $40 billion in new commitments in the three fiscal years beginning in 1986.
Clausen said in a recent interview that he will propose a large general capital increase for the bank at the annual meeting in Seoul in October to support that volume.
Through the first nine months of the current fiscal year, the bank's loan commitments totaled only $3.2 billion. But in the 11 months that ended in May, the total bulged to more than $10 billion, according to sources.
Recent large commitments included $300 million for Colombia, $297 million for Mexico, $349 million for Indonesia, $233 million for Pakistan, $500 million for India, $375 million for China, $256 million for Turkey, $125 million for Yugoslavia, $164 million for Korea, $85 million for Thailand, $75 million for Hungary and $84 million for Costa Rica.
Many of these are "structural adjustment" loans -- as distinguished from the bank's more traditional project loans -- designed to assist economic recovery through expansion of exports, to accomplish economic reforms or to alleviate poverty.
For example, of the loans to Indonesia, $156 million is for a fairly traditional irrigation project and dam in Java. But $147 million of the loan is to support a $245 million effort to enable Indonesia to train its own teachers for graduate and undergraduate studies. And another $46 million is to finance about half of the cost of a $95 million population-control project.
The loan to Colombia, announced last month, is the first of its kind made by the bank to that country. The bank said it is part of a financial package, including commercial bank loans, designed to reorient the Colombian economy toward the promotion of exports.