§ Mr. Hannam
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the size of the general capital increase recently agreed by the executive board of the World Bank and the accompanying recommendations.
§ Mr. Chris Patten
Her Majesty's Government warmly welcome the recommendation by the executive directors of the World Bank that the board of governors should be invited to approve an increase in the bank's capital of US$74.8 billion—nearly 80 per cent. —with a 3 per cent. paid-in element. This increase would enable the bank to raise its annual level of lending from around $14 billion now to over $20 billion by 1992.
We also welcome that part of the executive directors' report which concerns the bank's future policies. In particular, the report reiterates the importance of the bank's role in assisting Governments to alleviate poverty; and there will be a growing concern with the social and environmental aspects of development. The bank will also continue to assist heavily indebted countries, both in designing structural reform programmes and in providing finance. The report also recognises the importance of promoting the private sector in developing countries.
As soon as the capital increase has been approved by the bank's governors, I shall invite the House to authorise my Department to subscribe to the United Kingdom's allocation of 30,450 new shares. The cost of the 3 per cent. paid-in element of these shares will be around $110 million, which we expect to pay over five or six years beginning in 1988–89. The remaining 97 per cent. of the value of the shares will be callable, and as such will represent only a contingent liability.