Click here for Full Issue of EIR Volume 25, Number 32, August 14, 1998

1975: LaRouche calls for
Int’l Development Bank
In a speech to a press conference in Bonn, West Germany, onApril 24, 1975, excerpted below, Lyndon LaRouche laid out
his plan for an International Development Bank. The proposal was elaborated in a pamphlet titled “IDB: How theInternational Development Bank Will Work.”
The press conference was attended by 20 reporters, including from Reuters, the New York Times, CBS, UPI, AFP,and Corriere della Sera. But, due in part to a heavy-handed
campaign of libel by the U.S. State Department, there wasabsolutely no press coverage of the event. Even so, the ideaof the IDB received wide international circulation, throughthe efforts of LaRouche and his associates.
We propose the immediate establishment of an International
Development Bank as a three-way agreement among thethree principal world sectors, the industrialized capitalistsector, the so-called developing sector, and socialist countries. The Bank would discount letters of credit and bills ofexchange authorized by treaty agreement among nations andself-constituted groups of nations, and would thus act as arediscount bank for those other letters of credit and bills ofexchange generated in the course of supplying needs of final
commodities producers producing for bookings issued underrelevant international development bank treaty agreements.
For example, several key developing sector nations havedemanded that the industrialized sector negotiate interlocking agreements concerning three items: energy, raw materials, and food. Our essential criticism of this agenda is thatit included only three principal items, instead of the necessary four. The fourth item should be “development.” Ourremarks concerning this example are not conjectural; provided that suitable initiative proposals are generated by significant forces of the industrialized sector, key forces within
the so-called “Third World” will be prepared to immediately
begin working negotiations along the lines of such a fourpoint form of general treaty agreement with the industrialized sector.
On the basis of our own organization’s studies, and ourdiscussions of these studies with governments and leading
political forces within the “Third World,” we have determined to the point of certainty that the activities of an International Development Bank in connection with present
wishes and consumption capabilities of the developing sector, would be sufficient to generate a higher rate of industrial
20

Special Report

expansion in the advanced sector than has been seen during
the most prosperous intervals of the past quarter century.
The feasibility of this proposed program demands understanding of certain often neglected ABC’s of Political Economy. Without understanding those principles, we should all
be hopelessly caught in the worst disaster of human history.
The basic fact on which all political economy depends
is the characteristic feature of economy. That is, that a properuse of means of production and means of personal consumption generates levels of output in excess of the prime costs
incurred. The second basic fact, essential to this solution, isthat all general development, including industrial development, depends upon creating a basis for growth in an abundant supply of adequate nutrition at relatively low social
cost. To the extent that these two principles are observed inpractice, and advancing technology emphasized to that end,
it is feasible to generate very large amounts of long-term
credit without inflationary effects.
We emphasize that a combined concentration on bothindustrial development and expanded food production are
the absolute imperatives for this period. To the extent that
long-term development credit to the developing sector places
priority emphasis on rapidly increasing the amount and social productivity of world food production, any amount ofcredit can be issued over a 10- to 15-year term ultimately
payable in expanded food, in increased masses of productive
labor, and in the social productivity of human labor generally.
The immediate problem the new bank will face is this.
In addition to the immediate potential for substantially increasing agricultural output and productivity generally, there
are three regions of the developing sector which represent
massive opportunities for increases in agricultural output.
One of these, the Rio de la Plata region of South America,
offers short-term major benefits for development as an agroindustrial region. The other two, the Sahel, and the IndiaBangladesh-Pakistan region, represent potentially major
world food-producing regions, but will require 10 to 15
years of massive engineering efforts and development toapproach their enormous surplus potentials. Therefore, ourproblem is to provide a level of development equivalent toapproximately a quarter trillion current transferable rubles
annually, concentrated on low-interest loans and grants witha typical maturity in the order of 10 to 15 years required
for loans.
The apparent difficulty of conducting such programs is
only apparent and not actual. To the extent that the industrialized sectors can generate large surpluses in excess of immediate reinvestment requirements within that sector, that portion of surplus can be issued as credits and grants without
adverse economic effects. The only real problem involved
is that of raising the gross level of industrial outputs to thescale the indicated undertaking requires. . . .
EIRAugust 14, 1998

© 1998 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited.