I move that the Bill be now read a Second Time. When I was speaking last year on the Second Stage of the Bretton Woods Agreements Bill, 1957, I indicated that the facilities of the International Finance Corporation were available to members of the International Bank for reconstruction and development and that the question of joining the corporation would be considered. The purpose of the present Bill is to enable Ireland to become a member of the corporation.
The explanatory memorandum which has been circulated with the Bill indicates the objects and activities of the corporation. Its Articles of Agreement, which comprise the Schedule to the Bill, contain the regulations relating to membership of the corporation, its capital, its operations, and its organisation and management.
The International Finance Corporation is an affiliate of the World Bank and only members of the bank are eligible for membership. In May, 1958, the World Bank had 66 members apart from Ireland and of this number 55 had joined or were in process of joining the corporation.
The activities of the corporation supplement those of the World Bank; it is designed to promote the expansion of private enterprise whereas the World Bank concentrates its operations in the public sector of the economies of its member countries. The corporation's aim is to demonstrate in concrete form that soundly conducted investment in the less developed areas can be highly profitable and by that demonstration to stimulate the flow of private management and capital into such investment. Its success or failure will be reflected not so much in the amount of its own operations as in the extant to which they encourage others to channel their resources into productive private enterprise in these areas.
The first annual report of the corporation stated that the corporation would concentrate mainly on projects located in Africa, Asia, Australia, and Latin America. It is understood, however, that if Ireland becomes a member of the corporation, projects in Ireland will be considered as eligible for investment provided they will clearly and substantially contribute to Ireland's economy and are industrial in character.
The corporation has been in existence for only two years, a very short time in the life of an international organisation. However, it has already shown that it has many benefits to offer to its members and the wide range of its investment activities can be seen from the examples given in the explanatory memorandum. That the advantages of membership are widely appreciated is clear from the fact that over 80 per cent. of the members of the World Bank have considered it to be in their interests to join. In our case membership would help to encourage productive investment by private interests, both domestic and foreign. The possibility of obtaining financial assistance from this source should encourage the initiation of productive projects by Irish interests. Firms in the United States and other countries which would be reluctant to invest in this country on their own, might decide to do so if assured of assistance from an international financial organisation. Also the corporation acts as a clearing house for investment projects, bringing opportunities in the less developed countries to the attention of potential investors. It would, therefore, be able to bring opportunities for investment in Ireland to the notice of foreign firms seeking a profitable outlet for their funds. In all these ways membership of the corporation should prove a valuable aid in furthering our efforts to encourage productive investment in this country.
The explanatory memorandum indicates the financial commitments involved in becoming a member of the corporation. If Ireland joins she will be obliged to take up approximately 350 shares of the corporation stock and her subscription, therefore, will be of the order of £350,000. This compares with subscriptions of £14.4 million by Britain, £753,000 by Denmark, £3,046,000 by the Netherlands and £421,000 by Finland. The corporation will be obliged to repurchase Ireland's shares if she withdraws from membership.
Apart from the obligation of subscribing to the capital stock of the corporation membership involves the granting of certain immunities and privileges to it. They are similar to those granted to the International Monetary Fund and to the World Bank by the Bretton Woods Agreements Act, 1957.
Before Ireland can become a member of the corporation it will be necessary for the Government to sign the Articles of Agreement of the corporation 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. This Bill is designed to give approval for the acceptance of the agreement by the Government and to provide the powers necessary to enable the Government to implement the agreement. The Bill follows generally the lines of the Bretton Woods Agreements Act, 1957, in so far as that Act relates to the World Bank. The purpose of the various sections is indicated in the explanatory memorandum.
Deputies who took part in the debate on the Bretton Woods Agreements Bill, 1957, all spoke in favour of joining the International Finance Corporation and I am, therefore, confident that the present Bill is one which will commend itself to both sides of the House.