BCC President Agha Hasan Abedi was invited to speak on the BBC's World Service radio about the Bank of the Third World. The following is the edited transcript of the President's interview published in BCC inhouse magazine November 1983 issue. Gordon Woolford, from the International Money Programme, was the interviewer.
Mr Woolford: At last it looks like the long talked about concept of a bank for the Third World is about to become a reality. The need for such a bank has been discussed in meetings of the Non-Aligned Movement and UNCTAD. The idea was recently consolidated at a conference of developing countries' bankers recently held in Yugoslavia. Mr Abedi, how will the new bank be financed?
Mr Abedi: The capital of the bank would be financed by commercial banks of the Third World countries, whether they are in the private sector or the public sector. We have also kept the doors open for the participation of the central banks of the Third World coun-tries if they so decide.
We plan to have a capital of US$500 million, which we hope to increase in the course of time to at least US$1 billion. We plan to mobilise resources by way of deposits and loans from the com- paratively richer countries of the Third World. We also plan to raise funds in the international money markets and begin the operation of the bank with the minimum resource of US$1 billion.
Mr Woolford: How will the Third World Bank help the developing countries?
Mr Abedi: The Third World Bank will help Third World countries by establishing a mechanism to finance trade and multinational purchasing and marketing arrangements. It will also act as a vehicle for counter-trade and barter business between member countries.
The bank will provide short-term balance of payments support. It will provide rich financing against firm arrangements with approved inter- national financial agencies, such as the IMF, the Worid Bank, the Regional Development banks, other official and semi-official lending agencies and also international banking consultancy syndicates. I believe the bank should also provide short-term re-export financing for principal exports comprising significant proportions of the countries' foreign trade.
Mr Woolford: What will its policy be on loans?
Mr Abedi: This bank is being established with the specific object of providing short-term facilities only. And, therefore, the question of soft loans doesn't arise and this bank would provide loans on the basis of commer-cial banking, on normal rates of interest.
Mr Woolford: In what way would it be different from, say, the World Bank?
Mr Abedi: Up till now there is no financial agency which provides for the short-term emergency loans for the needy countries. There are lengthy and exten- sive reviews and examinations of the applications and proposals in the case of the World Bank. We would be provid-ing for short-term requirements such as the acute shortage of balance of payments, or emergency requirements for the
import of essential goods.
The BBC World Service began life as the British Broadcasting Corporation's External Service as along ago as 1932. Since then it has built up a reputation for editorial excellence and has achieved the largest audience of any broadcasting organisation which speaks to people outside its own country. It now broadcasts news, reports, and discussions on radio, tv and online. Over two hundred million people around the world reportedly listen to the World Service, which broadcasts in English other 40 languages.