Multilateral and Bilateral Assistance for Developing Foreign Mineral Projects

Gao ID: ID-78-50 August 15, 1978

Because U.S. development policy is strongly committed to channeling aid directly to the poorest majority of people in less-developed countries, in recent years the United States has encouraged international development institutions to place greater emphasis on lending in sectors that directly benefit the neediest people in these countries. U.S. influence in international development institutions is strong because it is the largest single donor country and has the largest voting power.

From 1973 to 1977, 5 percent ($1.7 billion) of total multilateral international development institutional loans were committed to foreign mineral projects. A total of 59 loans was authorized--23 for steel projects and the remainder for copper, nickel, aluminum, and other mineral projects. The International Finance Corporation was the largest contributor to foreign mineral projects, committing 34 percent of its total loans and investments to that sector. Foreign mineral assistance appears to be a low priority in U.S. bilateral programs and, except for the Overseas Private Investment Corporation, U.S. bilateral assistance institutions have not been very active in foreign mineral development. This is because these types of projects do not directly aid the poorest majority of people in these countries.

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