Public Business. - International Finance Corporation Bill, 1958—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

The purpose of the Bill is to enable Ireland to join the International Finance Corporation which is an affiliate of the World Bank. The corporation's functions supplement those of the World Bank and membership of the corporation is open only to members of the bank. Fifty-five of the 66 countries, apart from Ireland, which were members of the bank in May, 1953, have also joined the corporation.

The objects of the corporation are indicated in the explanatory memorandum which has been circulated with the Bill. The memorandum also gives examples of projects which have been financed by the corporation. The articles of agreement of the corporation comprise the Schedule to the Bill. These form the corporation's charter and they contain its regulations relating to its membership and capital, its operations and its organisation and management.

Having regard to the information contained in the explanatory memorandum and in the corporation's articles of agreement, I think that I may confine my remarks to the benefits to this country which are likely to follow from our becoming members of the corporation. The corporation's primary object is not simply to help along certain selected private projects by making loans available to them. Its purpose is wider. It is to demonstrate that private investment in the less developed areas when prudently made and properly managed can be both profitable and useful and by that demonstration to encourage investment in these countries by private investors. As I mentioned in the Dáil last week, our need is not for foreign capital as such but for the technical knowledge and managerial skill that may be expected to come with foreign capital. The possibility of obtaining assistance from an international financial organisation such as the corporation may be expected to overcome in many cases the initial reluctance of firms in the United States and elsewhere to invest in a country like Ireland of which they may have had no previous first-hand experience. We may also expect to benefit from the corporation's functions as an international clearing house for investment projects. In this way opportunities in Ireland which might otherwise escape their attention can be brought to the notice of foreign firms seeking investment opportunities. The possibility of obtaining financial assistance from this source should encourage the initiation of productive projects by Irish interests. I am, therefore, confident that by becoming members of the corporation we will be placing ourselves in a position to secure valuable assistance in the task of encouraging productive investment in this country.

The financial commitments involved in membership are indicated in the explanatory memorandum. It is understood that on becoming a member Ireland will be obliged to subscribe for approximately 350 shares of the corporation stock at a cost of 350,000 dolelars. The amount of each country's subscription to the corporation is related to its subscription to the World Bank.

In addition to subscribing to the capital stock of the corporation membership involves the according of certain privileges and immunities to the corporation. These are similar to those granted to the International Monetary Fund and the World Bank by the Bretton Woods Agreements Act, 1957.

In accordance with the articles of agreement of the corporation it will be necessary for the Government to sign the articles and to deposit with the World Bank an instrument setting forth that it has accepted the agreement in accordance with its law and has taken all steps necessary to enable it to carry out its obligations. The present Bill, which follows generally the lines of the Bretton Woods Agreements Act, 1957, in so far as that Act relates to the World Bank, is designed to give approval for the acceptance of the agreement by the Government and to provide the powers necessary to enable it to implement the agreement. The explanatory memorandum indicates the purpose of the various sections of the Bill.

This is one of the three or four Bills that we have had of this sort. I hope it is like one of those medieval military operations whereby all the little citadels outside were taken before attacking the main fort. I have not any great faith, however, that that will happen.

I was glad to hear the Minister say, as he said in the Dáil last week, that it was not a question of getting foreign capital in here. I have heard quite a lot about the scarcity of capital in this country from politicians over the past four or five years. My recollection is that the first person I heard publicly making comment on that of an appropriate kind was my colleague, Deputy Crotty, who said in Kilkenny a couple of years ago that we had too much capital in this country. I thought, in regard to the kind of campaign that was being waged at that time, that it was a very appropriate comment.

Last year, when the Minister brought in the World Bank Bill and the Bretton Woods Agreements Bill to this House, Senator O'Brien and I were in agreement that there was no great necessity for capital of this sort in this country and that we were unlikely to need the help of these international institutions on the capital front. It is something to think that he has been converted. Whether he thought about the matter before at all or not—it might not have been in his territory—the Minister certainly is now on our side.

As I say, I hope that when the Minister has completed this operation of attending to little outside citadels in relation to our whole financial set-up, he will then see about attacking the main fort and putting it in the same kind of order. If it is necessary to have legislation, I hope that he will bring in that legislation.

The Bill is to be welcomed, in the same way as the other Bills last year were to be welcomed. I do not think, as I said about the Finance Bill yesterday—I think I called it the "fat" Finance Bill—it will help the country greatly, but I see no objection to it.

I have not very much to say, except that my recollection is that, when speaking here last year on the World Bank, I did stress the importance of the advisory services that might come from that bank. I did say that it might be very useful to get finance for a big project, if there was a big project for which capital was needed. I still think we may need capital for a big thing of that kind, but principally I should say that if we did not think we knew enough about the project, the best way to get technical assistance is to get the capital and the technical assistance at the same time. The same applies here. This corporation, of course, deals with private enterprise. In fact, it does not ask the Government to recommend or guarantee a project. It acts directly with private enterprise itself. When this Bill goes through, it will be a matter for any private individual to get in touch with the corporation if he needs finance and make the necessary arrangement.

Question put and agreed to.
Agreed to take remaining stages to-day.
Bill considered in Committee.
Section 1 to 4, inclusive, agreed to.
Question proposed: "That the Schedule be the Schedule to the Bill."

Just to bear out what I said earlier, the purpose of the corporation, under Article 1, is "to further economic development by encouraging the growth of productive private enterprise in member countries, particularly in the less developed areas." I doubt if any Government in this country would plead that this country is a less developed area. I hope it would not. I do not think it would be true to plead that it is a less developed country in this sense, I am glad to say. Secondly, I doubt if we did plead it, that the corporation would be prepared to accept that plea. As I say, I have no objection to our carrying out this operation, and I think it is part of a scheme of approach, but I do not think there is really any question of this country being a less developed area. We have become a member of these institutions and they all link up together. I do not think the Minister would like to give that impression, either.

Listening to what he said in reply to my earlier observations, I think that impression might be got from what he did say. He said there was some likelihood that we might need capital under certain circumstances and so on. I firmly believe there is no shortage of capital in this country. I believe that there is a good deal of capital inadequately used, both monetary capital and real capital. Accordingly, I should not like anybody to get the impression from the Minister's reply to me that there was something of that sort in the Bill. We have all had the experience over the years of operations of this sort where expectations were aroused and grievous disappointment when those expectations were not realised.

Question put and agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.