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Folder Title: Martin, George - Articles and Speeches (1951 - 1955)

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RETURN TO ARCHIVES IN MC C3-120 Martin, Ge~;~·~- Articles and Speeches (1951 - 1955)

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DECLASSIFIED WBG Archives

'R.I. AFt' __t.. ·•.C: .. '. ·.~/Jh~

Speech / Martin - v .. AP'"""·c..a.c.P, ~~ ~ . ~ ~ ennett)

I oat grateful for the chance you have given me to visit Sweet

Briar in the Virginia springtime and for the opportunity to speak to and meet

so many cnarming la<ii •

You have asked e to t&lk today about the International Bank for Recon-

atruction and Developmeht~ or the Vorld Bank as it is often CE<ll.ed. I am sure

that all of you know that the Bank was founded at the Bre,tt"ton wood2 Conference

in July 1944, and that it h s been eai ed the job of !ding in the. financing

and planning of reconstruction nd development of its 49 member countries.

Rather th n talk on the Bank a~a its work in general terms, I have

decided to discuss instead one series of loan it has _ade 1n one particular

country. In this ay I can best bring ho e to you the ar!lount of York required

and the many problems that must be faeed nd" . overcome if through eclonomic

development th world • 11 ving standards are to be raised to even a. minimr.un

satisf cto1·y level.

One of he best illu t tions of tl:e ork of the Bar1k ie the story

of how it made its assessment of the development nee s of thiopi and

ultimately worked out three loens to that country: One for 5,000,000 to

help rehabilitate the road e7atem; a second for 2,.000,000 to supply foreign

excoong for an .Ethiopian de•eloPl!lent nk; d , a third for 1,;00,000 w

aid in the rapair and exteneion of the countr,yta telephone and telegraph

system.

I picked · thiopia, because it i the mo t. primitive country we have

bad dea~ings with to date, and it pre ent co posite of the difficulties ve

meet 1n making loans. In addition, tbe lo s re small and uacompl1cated in

their objectives, and they show that true development often lies in doing

certain simple thing first.

~hiopla by 1t& lt 1 · a .f c1n ting 1a • 1 is one of the last true

feudal momtrchiea existing od y, and i ruled by an peror, Haile Sel asie; \

,i

wbo claims descent from. Solomon and igns under the style of •ting ot lings

and the Lion of Judah. tt Th country i · bo t one-third again a a big E! a Texe.e

and bae a uxed r~ c1al popula tion of about ~,ooo,ooo p ople. Climate nnges

from eome ot th vora in the v,orld. in th lovl·~ nt! esert od jungle are s,

to one of tbe fines-t in the high p t .u r 1o , ··bich co priti a lt rge r •

The p ople o hiopia r engag princi p lly in grleulturs " nd

d cof e end hides are th~ir mej or export.,. . Industry 1 ·

emall d doem not even axiat in ':lY part o the country exc!ept as handi-

craft vor for ho se. What resoure is nyone' tuee ; but it ia

known that gre t potentials xi. t .in 1 ber ~nd f orest products; the aoil in

may sections i~ rleb; &nd t.hQre ·re· indic tiona o.t subs tial mineral depo its

including gold. One vi 1 aaset which kno thay 1 k, nd which is eesanti

to ruildin S. GOUU odern nc:ono::7, is s1~illed '\t.~rkme nd t aehnioi s... !here

possible Ethiopia ie co:mp n~ in f•o1 t.h s l~:..ck. by import g ~ ucll ;per onnel

from abroad.

~he qu ~ t,l t1.1a .. 1i ediately o ~s to n ind on •-:.» r. ination o.~. Ethiopia

islilere d velo t nould begin? Ccrt!dnly a steel !4l.ll r· t nig:uy com lie tad

industrial plant C¢iWtot, oo . lumped dowm the middle of the count~ tind $ p cted

to produee anything but trouble and confuaicn. There wo1.lld be no l a bor or

an g en t personnel to r.m th plant; ra me. teri ls woul ~ e ... ae: in g; no high-

way or other efficient tra.n port syst e:rlsta to e rve ch plant.; od, if

somehow 1t got, into operation no adequate ttarket yet e .. i sts in Ethiopit:! t·or

vh&t it would produce.

By this I ao not ean t ' t tba \'till not K:e l oans for eteel

mille and other 1.&-r e dustr l unit • a..tt, we ma;ce loaa o " that type only

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vhere e re certain th t the eople ad cono of t eount:cy concerned em

support high 1nduatr1Al develop e t. I · afr id that it will be y years

from no before t h . pire of' - ~tbio i a will be r ady for t he in reduction of

heavy induot y ·ttlto it ..;c0:n y.

What eoul.d th nk do for Ethi pia when 1 t turned - o us for

bot financi l d technical as i s t ne i 1~prov1ns i ts vconom1 and raising the

living st d rdd of --its peo.rle? fr n~ ly, "''llen the requc et vaR rtA.de e d id not

knov. To f ind the a er, t ne Bank folloved its u · al p etiee on receipt o!

such requests. Firat, it atudi 1 data v 11 bl- in th~ United St tes

which h d a a rin on the· ~· i tu tion in ~hiopi • Tt1en to fill i:.. the gaps,

an ill this c se they vera· big ones, · e sent out a field !!li sion to make· e.n

o . -the-spot &"llrvey of tha eOt.:.ntry. The Job o , thi i:ssion, which consisted of

a group of experts, w. to exazdne t e entire biop n economy, to decide

. bat ateps should: be t en for it d elopment, and t hen to judge which ate.p&

hould b t en first in o or to lay a pToper !ound~ tion on vhich to build

fUture development.

On arrival in Addis te, the \'; e ber. of the mission were given

every .ssist nee that the Oovemm t bad t it co1m ~tnd , and they h · d a private

udiance with tbe Emperol'"'• They tr~v led tbous nds of miles about the country

by every eonee-1 vable eane or "traneport r ·nging. !rom airplanes to their own

feet. And, prac.tically every day .or their travels t hey' e:~P&rien.eed and eontended

with one .of the basic weaknesses of the country• s econo1n7, the r-oads.

ter the conque t of Ethiopia in 1936, on.e of trs tlrst things the

Italians did vas .. o pour the e:.:-~uivalent of more than · 00,000,000 into a

highway ¥Stem to 'tfike the place ot the t Ue then 1n u.se. This ys,tem

included a route t.o Addis Ababa from the sea1 which city up to that time had

to raly on th.... .. ingle railw:ly 1 owned by the F~neh, for carrying 11 exports

imports to d fro tidev ter. A roadbuilders, tb Italian are v· ry good,

dt ye.te they constructed in lthiopi . of high quality, t ·ougb some

p rts of it vere l:lullt BtOf'P, f'or milit~.:ry than e onomic consider tions. For

ro d transport they introdnc~d ittt true • w ieh even nov serv s t~ b~ .. ckbon&

or ll road carr! rs in th country.

Vhen World War II came long nd th Italians ve:re dtlven out of the be-

country, the fin~ new road syst~e roe the r spon1ibility of the native Govern-

ant l eked the bili t7 and the equipment to

intain and repair it,, and due to r con ition.e. an1 eetioos ~f

the roadbed deteriorated to rema bl t p1d rate. Tod y. a

ri e in Jee· or truck in Ethiopia 1 on of til taost t.ooth aha' .in M<i spi,.ne

jarring experienc~s on record. Worse still for th country, 1t ia impossible

to ove goode quickly and efficient i y, a · trucks and othe ehicles ta e weeks

and ev-,n onth to oom.plete journey that in t United · t t s would take

matter of llirmtes or at o t f houra,.

one of the pri eipa.l towns in Etbiop1 to .visit nd inspect an inlpllrtant- eoff'e'l

growing region •• They pl&nne4 to spend the night t ~ eoffee pl~ntation ~nd

then return on the folloving day. A few miles from to-wn a J&ep bogged 4own in

a mud p.u4dle a big · s l e. Soon a couple ot Itali n truck driv ra, sauntered

long on foot, tbeir truck beitlg stuck u ., ahead, tmd helped to ·pull the jeep back

to dr,y ground. On q-uest! ~ the Italian dr;a.:ver ·, o•r en fot. d t-.mt it ordin­

arily' took a tr-.tck eix da.ys, nd poe i ly ~or , to get to the f.lan tion for

whi.ch they were bound.. This lant tion, ltbich by the way (Ur n n~ver r; aebed,

A strange spe-e\ of the road si tuatio .. in Ethiopia is the fact tha. t

the Governmetl t had 11 t · le or no knowledg s to how baa 1 t w. · • Lack of

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ad qu t coJIIWlie 1 on nd a · e for eo:.ap r son • 1 t

ut or1ties to gaug th . ondi ion of tn ir high,. y y t rn .

po sible for the

It ie here: th~t

the orld . nk' loan and teclmics.l surv~y s sions are contributing one or

tbA ost 1 port ant el menta of tr..1e d~elopment. By bringing expert ovledge

and a fr .sh view 1nt to an under-d. eloped co try they re better able to

asess the aal:t nt f turea d · s o . th ecoz may hat r naturally

overlo-:1 &d by i;ht) vi 10 are too f . li 1~ vitb. tbe local ecens.

Previously I entioned that ~,thiopia in f; .... from re dy ·to e park on

cour e ·of gree.t 1' stria expan iont nor e.en th country instit~uta great

change in gric.;ltut 1 pr ctiees a.t t -;: r ~ent ty • T e inl ial At v in

th de elopmant of ~iopia, w~ believe, mu ·t be a1reeted tow rd efficient

1 tiliaation or :,..ar pl"9eent eeonC\Hr.f• Tbis, tl . cou try h s nev';!':r bfa..en able to do

·n its o ~ largely be®l.Se of t ~ 1 olation of tne iifferent rtas fro;n each

other.

P rl:t~pa, the sic: ct re for this condition is the r hahilit t1on of

th road n t or. t~.nd its proper intena.nc ai nd repeir. In additi n, to bll1uing

the country toget,i"'!n• :ro~::rre closely politically and economically 1 &,n efficient

sy t . will permit a g:rMter e ch n(~ of' good& not only wit .. in l& hiopie

~~t v~th the rest of he world ~ well .

hiopitm coffe$ ia one of the .fine t in the v~J.rld. The COllntry i

not· only the: 0 e of the coffee be ... , cut it roducas pra.ctically all or

th orld's supply ot Mocha Cof ... ee. A mere tric le of tbie coffee ia exported•

d the s.m.e 1 rue o:f oU soads, cnttle~ and hides which e.re produ-ced in

fficient Quant ti t<> meet dom stic needs and to permit of tbst mtial

xport •

E:q:Jorts nre particularly vital to 6 country suoh as ~;thio ·ia, as they

r th on1 . eP.ne by whic . 'tht: couutry c n obt :n u e foreign exch: nge with

vhich to bJ.y equipment a.bro d that is needed for de't"elopment, o:r to pay o 'f

development lo .ns in foreign currencies.

Consequently, the flr~t loan reco end d by the Bank' mission w. s

o for · 5,000,000 w enable Ethiopia to bly- and import the e.q_uipment nee-easary

. for ro .d relwbilit tion and mai ntenat ee. In viev or the fac tha't the Eth opiari~

on their ow w re and still are un ·bla to c rey out a progra for their roa

the Bank tied several r;:tr ngs to this loan. Al:lon other things it insisted tha.t

a sQ~t~utorlomous road authority be organized th t would hsve full pOW'er end

responsi .. llity t.o oversee ftnd cs.r for the road'Ways. \i'! further Ht\Uit-ed that

the bead of this lllithority be an expert on road systems ~n d that he b S> a1dedltv

conpetent sta ff. ~iopin e.greed to t hesa conditione ~:.. d the req:..tired

~uthority blaB been formed \tith ite chief e:x ~;eut.ive a rot~d expert from the

United St~tes. These ref~uirem-nt.s by the Bank are in line with 1 ts general

insistence that the borrover~ mu:.t do all in th-sir power to in~re that. the

obj ~c~iY~_&, .s;f' t he l n 'they M"19 received from. us are achieved.

On their ~nderings about E.thi~pi , our misai n noted another

s e-riou wea!.mees in . the ~\ltrtryJ a lack of comaunieatiooe e1ther by telephone·

(ir tel ogxap)l. ! 4l us ".Tho teke r.:uch t..~irtf~S rtf.! phone calla or telegrams in

stride, Ethiopia is far behind the times. In Addie Abe.ba there r~re only 1,500

_tel ephones, ·and tor t .h.e re. e.lnd~r ot the c.-ountry there ar only 500 more. To

make matt~rs wors-e ell or· tne 500 phones outside of Addis a on one cirau t -.

As ,a result if aomeone calls his sveethe&.rt next door all of the otb.~r phont'Ss

a.re out of service $ long e.s t he co · ve:rsation l asts.

In fact t.hi~ E;ingle line ,circuit is eo j·ammed .the:t people bring their

bedding with t.hem. t .o the telephone office ttnd sometil'AeS camp for dny$ waiJ1ting

for the line to clear. This kind of phone system is hard on 'those da&1ring to·

m.ake ~· eo i al calls; bnt., it literally drives wsineesmeu end gove-rnment

official.s out. of i,heir minds. For 1nstJmce, a trucking firm once it. sends a.

truck out ha no ae&ns o-f ge~ting in toncb with the driver until h-e retuma, 8ll1d

t.hia may be months lat er. Met\nwhlle , the driver may go off trucking on h1a ow

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-with the oo p yt s 1 ent, na en he turn ls · th t the ro~da vere o

d t.hat he couldn't get ett a .y · oone • prop r phon-e and te i egr ph service

shwl h 1 p teri lly in en ing t..b.ia littl e .et.

Our ission on its rat"'•m r:eport .... d on t lie cttnditl n of en<; tv~ ne~d

for bett r communi ti in hiok'ia and rae - ~end .d hat fu er st1.1dy be

g :ven the probl by .: speci 1 oup of expert ... hi f.i - 1~. &1ch . . group

wa..., s nt ou Ptt'ld on e. ·. .aie. o£ t 1.c;. r'E' orts of ho h ~ .. 1 ~i nE we 1 ltim tely 1:nade

Ethioo; in e 11') n tor ·11 500,000 to ~lpply !'J.rtr o too rora:ign e'Xchl?.nge neces r:1

to purchase nd im.port the equi ?ment for a telepbo~- 8J:Ii telegr~ph netvork. Our

work in this , ogard wa aided by t: e r c.t t.be · t,h . -~ eone mJ. . ton found 55,000

. te 1 telephone poles alre dy s r-1 ~ g with wire which h ~ ·~ 'be n 1 ft " the

ItaliallS, but which bad evsr be u p t to use by the •

There -were, it is tnu~, s e g&.ps in he ra, where n tiveij h"' cut

out secti s to mnke co-stume jevelry, rut most of it v .e i teet nd what -was

need d to mak · the system vrorlt were switehe" -.. .. circuits.. Tbeee will bE·

supplied 1 l rge m.Ga~-e by our loan •.

e de thio loan in he __ liaf' t,ha a ff1cir~n oom::tunie&tiana

syst ie vital. to the basic develop ent c , Ethio 1fl. It will ru plen.ent

the ro .de in bringing the cotJ.ntry 'together. ·'uell;y important, such zyat

will help the Ethiopian tusinessman, coffee grover .nd oth r tyoe of pro~ . cers

bv , gi -,1ng th for the first tirne channel t rough vhich they will have :. uiclc

ee s to inform tion concerning m etB nd prices, both domestic and foreign,

for ·their res.

A:g in, a,s in the ease of our r®dll&y loan, Wrw; anted to be sur-e that

the teehniesl ability and authority would be on hand to supervi a the ins -11 tion

of the ne1 communications system and to age it once it wa i $tallea. 'to meet

this requir ent, the Ethiopian hElve set up co n1cations !•thor! ty along

lines ~i::dlar to h .t lt-< .naging the road networ

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iopi unsu . l of tbe .hree we ve

tb re. rpri ingly1 o r fir t 1 ion found the inningt of li ht

lnau triu development i.n the country. , eh oi' it is bee~d - r1 s ill plants

an ee,~uipmaut brought in ' the It..ttli n · bet 1 1936 n 1941 to ana.ble them

0 ess ueh 1 e oil se~ e, coff • 11 s. any of 'the

ope.t'IQ ting un r riou difficulti • i thor th .y- were never

co pl t d nd 1 elt 1"' portant p rte gnd equip ent, ol el-~ thby ..:~ dly need re ....

pJ..u.cemente ;f'or 1rornout parts .. nd ma~hinecy.

o .elp in the iinaneing o.: the r habilit tio, ·;ui EV.;)6Usion of

these s ll businesee our

shou.ld orv..ni~o u tri 'l dovelopt '·\·1t nk. The tJl.iopians ec ... ted thie

~ 1 ggestion, d tile d. elopmeu't nk is in proc e of organiz~tiort under e

ge •. ent., Si.."lce .... bst nti 1 pert of the nqu1pmen and

other i te:_ s for indu trita..l

.~thicpie. 1 tbe <orld &· hA

ev lopment vill h

lent it ~~ JO,OC

to COQ • ·m outside of

to lp it me t a part of

these foreign exchange cost • Loans !r&de bJ the indu.tr ·1 development Mnk,

which in r li ty , ill b~ 11 rusinesa _ oar~ s, will require the pf:t oval of the

&.de availa bl ....

It ie obvious that opportunities for further deYelopaent lo a 1D

Eii110:P:ia 'are many,_ and · t a later date ve may ke addi'tional commitment

there.. In the beginning, however., we ast ove very slowly, as to ove ahead

too quickly would be wasteful e.nd eostly both to Ethiopia and the Vo:rld Bank.

l · I ha'V'e eJapba ized before, the country is not ready either econom.icall7

or aoe1 lly for develo · ent on a broad scale.

o c pital - · rket is 1la ble in thiopi o raise the local

eurr ncy to et h local co t or d velo er1t 1 and in ma.ny inst nee the e

eo ts comprise the greater rt of dev lopaent xpens • Pu.rther, ekUled

orker nd technici are in short upply to pl :n and anage development;

rltet at vol ed for vhat dev lopaent will produce; nd, finally

d oat portan't of all, the psychology r the people st be condi t1oned

by degree• to accep-ting a nev y of life that ie almost whoJ. y foreig:1

to the eu and tra.ditiODB or th country.

ow" that the orld Bamk • d thi serie s of three loans to

hiopi , 1 t will not it idly by UD il it i ti e to collect yment•

of 1Dterest and principal on our co lt ent • Ins d, following our usual

pra.et.lc , will keep a carefUl ch ck th use of the loans to insure

that t.hey r epent for the goode and •erY1cea, agreed upon bet: een us ud

the Bth1opiane. During he con tructi of th various proJ eets we will

peni e and watch their progreeJJ through ex••1n1ng report and visitt of

i.Dspectlou·. Late-r, when the projects are ec:apleted, ve vUl contin\ e to,

tollov through 011 their au.e·eeasful operatiou, and will stand by ready to

~elp th Ethiopians .and th develo t of t eir conomy vhenever we ean

1(1\h sound t -- cbnic l advice nd po sibly with financial aid as well.

I · I have ttapted to ahow you that the Bank 1n f'oateriDg develop~teat,

whether ·1n Etbiopi or in y of t tveDty-three countries vbere it baa made

loan• unt.ing to • ,loo,ooo.ooo, pproa;chee ita jo,b in • busine like way.

ao.etime we re aeoused of being too buaineeelike, bo.t. for u to l:et our

rt . run too f r 1 with our he ds would be disastrous. .In unsound and

unecODo c loan in an under-developed country add.s nothing to production,

1t y an often does add to inflation, and in the and .all the country ha• to

ahew 1 a usele s debt that eta ae a dl-ain on 1 ts resert'es of foreign exehaage.

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In clo ing I .ehould like to point out again tba t the 1• an

i.Dte-m tional organ1s tion owned by nd oper ·ted for the benefit or ite

49 aember couatri •• All or these countriea are bera br virtue of their

eontribut.icn to the pital of the nk and ve oice in our management.

On our · tatf v have citizen or about 29 different countriea.

One of tb things t.h t eurprie d on Joinin 'tithe nk or than six

ODths go• vaa the y that the various ea~er countrie and the staff

orgot their in ividu 1 interea s and nation lit.ie and work for the good

or all. this I believe ve 1 ae a ho · tul si that hen eow:1triea

get together v1 t.h a eoam.on interest nd aeetr on a COIIIIOD ground they can

r.k in haraoay 'togetb r. Let ue hope t t eoae d 7 the na tiona of the

world can eet ia a ailail r 7 ill handlin and s~ tl1Dg the polltie 1

robl that ar -tearing the fa brie or aocie\y ap rt tocl ~.

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