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THE WORLD BANK GROUP ARCHIVES
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Folder Title: Martin, George - Articles and Speeches (1951 - 1955)
Folder ID: 1652169
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RETURN TO ARCHIVES IN MC C3-120 Martin, Ge~;~·~- Articles and Speeches (1951 - 1955)
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'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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