Resource Flows to and from the Multilateral Financial Institutions

For the purpose of this study multilateral financial institutions (MFIs) are being defined as those institutions which include developing as well as the developed countries in their membership. These institutions have played a pivotal and growing role in the flow of financial resources to LDCs. Looking at the external financial receipts of LDCs one notices that LDCs received 9.2 per cent of their total resources through these institutions in 1970, 13.7 per cent in 1980, and 7.6 per cent in 1983. Approximately 90 per cent of the financial resources received by the MFIs came from the industrial market economies. Many of the MFIs which are now one of the important channels of providing concessional financial resources to LDCs were created in the decade of 1958–67. Prior to this the MFIs were limited essentially to the UN and its specialised agencies and the Bretton Woods institutions. The newly created institutions were of two kinds: First, two major funds were created in the framework of the existing institutions with a view to consolidating multilateral operations. These were the International Development Association (IDA) (1960) administered by the World Bank, and the UN Development Programme (1965), forged out of the Expanded Programme of Technical Assistance and the Special Fund. Second, this was also the decade marked by the establishment of three principal regional banks; namely, the Inter-American Development Bank (IDB) (1959), the African Development Bank (AfDB) (1963) and the Asian Development Bank (ADB) (1966).