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Folder Title: Chronological files - (outgoing) - Chrons 56

Folder ID: 1771943

ISAD(G) Reference Code: WB IBRD/IDA 03 EXC-10-4541S

Series: Chronological file (outgoing)

Sub-Fonds: Records of President Robert S. McNamara

Fonds: Records of the Office of the President

Digitized: December 18, 2012

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THE WORLD BANK Washington, D.C. © 2012 International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org

PUBLIC DISCLOSURE AUTHORIZED

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ArehiYflS IIIII I! II! II il l IIIII II IIIII II I II ill // Iiiii ill/Ill

1771943 A 1995-252 Other#: 4 3096498

President's papers- RobertS . McNamara Chronological files- (outgoing) - Chrons 56

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Cleared with and cc: Mr. Lerdau

JEMerriam/ELerdau/WBennett:rgw

December 23, 1976

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(Signed) Paobert S. McNamara rt •

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DEC 2 3 1976

·t8igned) art • ~- . cNamara

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IMMEDIATE DELIVERY

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cc: Mr. E. Magnussen Executive Director

cc: Mr. McNamara's office {2) Mr. Cargill

FVibert/lmh December 16, 1976

DEC 2 2 1976

( .igned) ~~o· ~rt S. Me amar

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cc: Mr. William S. Ryrie Executive Director

D L 2 2 1976

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(S.igned) Robert S. McNamara

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l(Signed) Hobart S~ f\v1 cNama~ ·

SPlease:RMcN:mss

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Dec b r 20, 1976

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ee: Mr.

RMcN:bnun

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CLOUL CIDIWI'f XS

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The u; er of proj ct• containing relativ ly 11 iiiiKJUII

loc 1 co t financtag pp re to b 1 er t th itt proj ct cheduled for Board r 1 oo

tn vi of the cootrov rey which sue fiaaucing tlaul.atea. reeo tztog th 11 contributiOD tcb it to tb tr

fer of r ourc , would it t be vi to r triet our finaDci g of local co t to tho f • r th 1 rs tb co tribution f tal to the country • c1 t progr 'l

RMcN:mss

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RAC1arke:ean 12/13/76

DEc 15-, 1976

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diac.ua•aea today,

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cleared with and cc: Mr. Yudelman

8 1976

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cleared in substance with and cc: Mr . Merriam cc: Mr . Venkitaramanan

ABerg:cm · December 6, 1976

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(Signed) . obert S. McNama~

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bee: Mr. McNamara's Office (2)~ Messrs. Stern

Clark Blobel Shibusawa

YHuang/EStern:ls December 1, 1976

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DEC 2 1976

With

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(S.igned) Robert S. Mc Namara

bee: Mr. McNamara's Office (2)~ Messrs. Clark

Stern Blobel, Alisbah

EStern/Is , December 1, 1976.

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December 2, 1976

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{Signed) Robert S. McNamara

cc: Mr. McNamara's Office (2)~ Messrs. Clark, Stern , Blobel, Dunn

EStern/Is November 23, 1976

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December 2, 1976

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Pl cepe

-- ly. (S.fgnea)_ R_!)bert S. ·McNamara

cc: Mr. McNamara's Office (2)~ Messrs. Clark

Stern Blobel Shibusawa

NAGibbs/YHuang/EStern:ls November 23, 1976

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(S.igned)

bee: Mr. McNamara's Office (2)~ Messrs. Clark

Stern Blobel, Clements

EStern/ls, December 1, 1976

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To Mr. Baum:

Thank you, Warr n, for nding attached note and fo~ your action in cl ring up any confusion b twe n "t rg ts" and "beet estimates."

I waa di turbed, bowever, to . read in the inutes of th ting a r f renee to 'pr ur • to produee proj et•." I cannot stat too strongly that there should b _ no "pr • res to produce projeete" othar than in con-formity with accept d Bank tandards. We should thi point clear to all Bank ataff bera.

There is, of eourae, for eaeh Proj ct Division and Depar ent an oper­ating plan prepar d by that Division to earry out it r po ibiliti (and in the a r gate, the reaponsibilitie of tb Bank Group) to h lp me the needs of the develop in countri a. Th appropr:tat re ourc:ea ( taff reonnel, administrative budget , te.) have be n provided to carry out the op r ting pl ns. And it i the r aponsibility of t nage s to ither me t the plana or to propos chang a in th But und r no aircumatanc will w permit achi vement of th plan y violation of th quality of th tandarda on whieh the plan was premised.

I ~~uld like you to et togeth r with Jim Kea and org nize session with the Regio 1 Vice Preaid nta so that we can dig into th qu stion of any real or perc iv d upreasures to produc proj ts."

I am endin copi of this not to each of th individuals r c iving copies of th att ched minutes.

Robert S. MeNamara

Distribution: Me ars. Knapp, Baum, 11, enj nk, Chadenet, Chaufourni r, W. Clark, Krieg r, St rn, Wapenhana, Alt r , W iner, Gabriel, Gordon, Burm.eat r, inn

Ballantin , Fuchs, Jaycox, Kanagarat , .L j un , Rovani, Sadove, Tolbert, van d r Tak, Willoughby,. Y d lman, Ki Israel, L e, L th•, Lithgow, Morse, Raizen, Ray

Encl: To ~~. Ba Pg. 2 of Nov. I Minut ~ with RMcN h Ddwritten note. To Distribution List: Pg. 2 of Nov. 9 anutea without RMc note.

cc: Mr. Kearns

BMcN:bmm

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Department Directors and Projects Advisory Staff in. Central Projects Staff

Quality of Project ·work

J, 11~-7· (-/ ~ _.._, . . .-{,~ ~· ~ ~~-:-v(-1: ~-~ l.A •')-~ (/ r-:; ,, i- t-r-(_

Noveml5e; 9p 19~6 .. /~( -~(~k~t ~ '~I CJ~' ~ ;:.{_(._/_~-:;(. "Y~.J: • I j\ '

~ tL ):t~ ~ -tt..L. Mr. Baum referred to a recent OED report which had suggested 1 . I I

that, under the pressure of circumstances a "target" rate of return (}'Vj .-"'...~' had been used to justify a project, . instead of the sta-ff's "best estimate'!.z:'" ~ '"hich was much lower. He emphasized once again that, above everything, . _ J 1nanagement trusted all staff to reflect · their professional judgment in their work. . I ,. I~

~ ~ / It was recognized that, by the very entrepreneurial nature of

their work, there was a danger that staff would tend to be optimistic

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~

in their forecasts and underestimate the difficulties and risks involved in their projects. In addition, it was often very difficult to make ~ ' · valid estimates of rates of returns, in particular in agricultural , • projects, where data on crop production often were averages covering a Ll.,..yt' l'j.1. wide range of circumstances, ~nd actual results would depend on how · . many farmers could achieve the project objectives under variable weatherl.~r. and growing conditions, and especia~ly how fast. Concern was also · .. . ~ expressed about the possible dilemma of the regional staff when "'7--fr confronted, on the one hand, 'iiJ:Jl_the pr~su~~s.-t.o_pJ:.o.d: ~oj ecte or · . . substitute projects to meet lending program objectives and, on the ~ ·[ other hand, with their professional standards.

1• ~ (

-· ;-../. It was agreed that the staff should be made aware that

management unequivocally expects their recomn1endations to be based on their best professional judgment, with an indication of the nature and range of the uncertainties involved and a candid discussion of the fo •. .A :" ~.:-t;. factors on which the outcome depends. Under no circumstances should 1/ 1 projects be made to look better than expected by the use of estimates ~ I

that are based on "optimistic" assumptions. Nor should "conservative" assumptions be used in cases where projects had · a high rate of return f .~

since this biased results in the opposite direction. To do otherwise J - I would not serve the interests either of the borrower or the Bank. ~~ !, '

3. >; ' ~ I fc-:- #> ~ r.·•

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DISTRIBUTION: Messrs. Ballantine, Fuchs, Jaycox, Kanagaratnam, Lejeune, /. .....:;< Rovani, Sadove, Tolbert, van der Tak, Willoughby, Yudelman, ~ ~ King, Israel, Lee, Lethem, Lithgow, Morse, Raiz·en, Ray~ ~.

cc: Messrs. Knapp, Baum, Bell, Benjenk, Chadenet, Chaufournier,~~~-w. Clark, Krieger, Stern, Wapenhane, Alter, Weiner, Gabriel,~~ Gordon, Burmester, Finne.

FLethem: lie )1.

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Department Directors and Projects Advisory Staff in Central Projects Staff

Quality of Project Work

November 9, 1976

Mr. Baum referred to a recent OED report which had suggested that, under the pressure of circumstances a "target" rate of return had been used to justify a p~oject, instead of the staff's "best estimate" which was much lower. He emphasized once again that, above everything, 1nanagement trusted all staff to reflect their professional judgment in · their work.

It was recognized that, by the very entrepreneurial nature of their work, there was a danger that staff would tend to be optimistic in their forecasts and underestimate the difficulties and risks involved in their projects. In addition, it was often very difficult to make valid estimates of rates of returns, in particular in agricultural projects, where data on crop production often were ·averages covering a wide range of circumstances, and actual results would depend on how many farmers could achieve the project objectives under variable weather and growing conditions, and especially how fast. Concern was also · expressed about the possible dilemma of the· regional staff when confronted, on the one hand, with the pressures to produce projects or substitute projects to meet lending program objectives and, on the other hand, with their professional standards.

It was agreed that the staff should be made aware that management unequivocally expects their recommendations to be based on their best professional judgment, with an indication of the nature and range of .the uncertainties involved and a candid discussion of the factors on which the outcome depends. Under no circumstances should proje~ts be made to look better than expected by the use of estimates that are based on· "optimistic" assumptions. Nor should "conservative" assumptions be used in cases ~here projects had a high rate of return since this biased results in the opposite direction. To do otherwise would not serve the interests either of the .borrower or the Bank.

DISTRIBUTION: Messrs. Ballantine, Fuchs, Jaycox, Kanagaratnam, Lejeune, Rovani, Sadove, Tolbert, van der Tak, Willoughby, Yudelman, King, Israel, Lee, . Lethem, Lithgow, Morse, Raizen, Ray.

cc:. Messrs. Knapp, Baum, Bell, Benjenk, . Chadenet, . Chaufournier, w. Clark,- .Krieger, Stern, Wapenhans, Alter, Weiner, Gabriel, Gordon, Burmester, Finne.

FLethem: lie )J...

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N nv ~ . 1976

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(Signed) _:" · ... McNamara

WDClark:af

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, av b r 30, 197 6

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Many or invitation to inn r on JaDU ry 13. Unfortu ly. for ~ a t-ent b r in Rash OD will e it po atble

for ... to att

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10603

RMcN:bmm

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D ~. i1t1.1:~ Ian Hnh lor Dircctor-Concral Jorld H..:.alt Organiz.:ttion

1211 G~ 1evn 2 7 .. , ~vritzerlc1d

/ Your letter of October 6, concerning the Special Pro[;rcnr e fo .. Pc~carc~ nd Truining in Trcpic;ll Di:;.~e~w · u., arr:i.vcd ,.;:d le. I t-. •. "' i~l

.. mnila for the Uorld Bnnl·" ~ Annual M ctin~ . I left for a vi0i t o a nu~·~hcr of Asian countries soo after ,,y :.:eturn to ::t',.hi.s.gt:on --· j ur· t a ::tor we met at w~c ACC. l'lutS i is only nm-1 I run • lo to cply o you.

You ':tSl· d, in b~hnlf of U1:DJ' a lirell '1'1 1/l.lO, 1artk would be willing to joi t1. c t. o or1~r.ni .... ~t.Lo '\S in co-Gpm sor·ur t~ e Spocial L

1 ro;:;r.sm.mo ) and \:.r'H:~t~lcr it ·lO 1ld , qrc.e to :~.rvc 3 f.'· c,·l ngont for tl c proposed Tropic 1 .... i<'·(;~( .. s Fund . I mn pl(,~::t e ... 1 to .8 y thnt I om prepare 1 in princ ple ·o pru 1•o.:::o. to t lC ll;;mk ' Directors t ~at he BanL n:-p:eo. t<> :)lay the~c roles .

I aay tli principle" for t~ o rar....sons .

1'hc first is thr•t I \'lould wi'"lh to h~ in n the r:>tl:.Cut iV() Director.~ a mor(~ prc.cir:- llC!ncrlption o · t 1 implicat_ons of tl Progr.m•,1,.10 th:r1 o -.:c..~r ., fl(.""sibl nt t a'1r-w.lc:. that the financinl r T.'()jcetiono '{'1'ill b "c:inc< ; of poten tial donors uhich you arc con .;~n:fng on Dcceml. er e.

' Th0. second rr; .n on ralatca t , t . ~ >r '>poecd tnok f otce ~ nd n· t: -Tor,·.

a~>rro··ch o:f the Pro;-~rnr .. ..n.o . Tl 'lre iu .;,1, Cf.:r.ict'!3 ques io :ln .. ' .d.n<. lJhcther this approo.ch, \l~liCh con t wl\l) .:lt.CS nrry in'!, 0\.\ rp·· ::l.rc' t t n -:l trainin;; for all si;.~ dis~vs .::1 in u lr•:;:ogc nur.\bor o · ln ~ivi u.n.l ccntt•r uhich vnry. conoidcrably in thoir prc:3 · .~ .. t qu.:1lity "'md r ~ 1ide:-:.pr gco~ra1)hically, can be e)qH~ctcd to ·n:ovidc. t:"Je crit. c .. 1 •':tss r. l't to create and ma.intoir the mot1f,.mturl -:;,ccc.:.H;a··y to produq. opt:l. ~mn L Llt:

t:~·cly rc::;ults . ~Joreover,. the::;c c n-acteriatics ' r ' .tl3 ... h J.-o j_ 1.1""!' nt in the comp lex nature n~,. scope of th_ Progrrur.m..:!! Hill irevitubJ.y

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l;r,. Halfdan Nw"ll-:'!r 2 November 23, 1976

co. front the executing agency with n coordinatin;; o.nd man .. gcr:lal tr ·1k of extraordinary magnitude. In the circumstances, end particularly ber::attnc the proposed approach ia ~:::tpcr:+mcnto.l, in tho Gcn ... c~ th a · it h:.1n not been tried befcrre on t• ~~ scnla conteltrplatcd, I \lculd lil·:c to sw;gc:o t that 1 t lvould b£:1 prudent to mc.kc provision for n;-~:~roac1 in,; r. search and training activity for nt le-:-tst one 0 tl e disrw.ses' in nome different 1 provc .. ~n monner. 'rh1.s tnight b'-~, for r..:xr:..t 1plr , to co 1

fidr.! the attack on ho n~rticular din eut:e to a single ~std.>lisl .d (o · CVl.!n. a neH) instit4tion with appropriate outreach activi.t<.:~s. I do not believe that StlC ·1 a nodificc t.ion o.f the plan w·ould or should thllt.~Y t i a :tni t:iati.on of ·the general Progra..1uue,. and I recomr1.end it 011ly because I am anxious that the PrograuUi!l bo a succcso . I an as kit f' Dr . James r.~o, the Bartk 1 s E-nvironmental nd Health Advin c.r,. \vho utll · re;prescnt the Bank at tho Dccemocr 8 acting, to r aise this question ;v1i t- you and the U1 Dl'.

As you kno-v1 ~ the Bank staff \vho u1ve been workin2 closely \vi t:· ~itaff of 'dUO And Ui-.DI in tho preliminary plnnuinf} for the rror~l:'cll.'ln. :!

hav~ b'~en particularly concorncd to ~nsure that th~ org;.~..uir.<1tion:: 1 .:1nd mat agerial a.rran,,;mnents propos,:id are sonrH.l and :.:mpropr:tnte . I Ctn glad to learn from them t.)at they aro satisfied on this po nt, and I very rnuch welcome t 1e t·1illingness of \1 l0 t:o serve nr;1 tlu; ex(• Cut:J.n.,~

r,oncy. I am also gratified that, on tba basis of e:t::p (~rienc~ in tl .... · rivcrblinduess pro:-ram, you and lfr . Horse fc 11 th a it uould 1 c 1·1lpful to have t a Bank serve as fiscal agent . I t4m told that this ·I a i also t~H3 u J.nnintoutl recoU'omendntion of t 10 Forkin ·' Group w1 j_ch tTdt to conr-:i~..~ i: the orgnnizati.on a:u:td f:i.nancing of the Progi"lXmne lno t July.

As to the po::Jaibility, w·dch you also r aise in y('lur 1 :!tt .r. ~ o[ finnnci· 1 contributiOll fror.1 the tcnk, I c~nn.ot nm-1 ro.uke any cot· ·lit.· . 1t in that respect. and I u.."'ldiOrntand that a postpon -tnent o~ thin rtU-,Jtirm will not 1ave any negative con~ eC!ucnccs for ti o lau Jchi.nr .. of the P rogr nmt1 e.

I c::<tend my good, t,rishes for a. unoJ.·ul meetj_ng ~lith potential dono ·q

neJtt month . I woall ho·>c t hat th~;;; Trop.:f.cal Disc.w.Gd I ro·3r .. nme rrov .-:: , . u ·· cc.csoful, in its tvay, aH HHO ' s :;·dnll··OX e1·ad".u t:ton cc:pa. ~'.n? ~t , I extend my -:;·1.anu -conr,r~tulc:atio:lS to :n.:) '3 rccip1. . t of thf..! Sne · .. i.a1. /O:P ~ t Lt\sker :>ublic Hcalt.1 Service A•..-1ard for ito achievcn,ent in th.nt r .'lp ·:c ~·

I am sending a copy of this let t~r to lira.d l'1oroa ..

SBoskcy:tsb Cleared with and cc; Hr . Baum

Dr . Lee

Sinceroly,

Robert S. Hc! ~runara

Office cf the President (2)

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llia eeU acy tfecuaaddiD Er aka Deputy - riae ~ ..... AllkaTa. Turuy

k an fox: the the le ctae

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...... November 23, 1976

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November 23, 1976

Sincerely,

Robert S. McNamara

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ee Mr • .Jaeq d Groot , bee t:l: e Director

Hcllu..r.a'• offic:e (2 . ec Bee r•· ·Dubey, Pollaa, Chopra

pp, Paij , X.Ox, Jeajeak o/r. DaYar

AJDavar /lfP rt: rpo 109 r 18, 1976

November 23, 1976

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Nov ber .:16

MEHOJWfDUM roa. Dlt.. LEE

l bav• :no rea on eo belie:Ye t.ha~ anyone le ·planni.Qg a coa t.al prej . t for Aldabr 1 land in tbe Seyehellu, but lf aay,oa · ev r doea aug,_ est such an operation, pl se d1· cu•• th ~ter with me befoTe you pr~eed with it.

~ };ty)(_4 Rob rt: S. MeN . ra

RMcN:bmm

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ce - ' offie (1) • j • Bart/Mr. Coudol

18 1976

($igned) Pn ~rt S. McNamara·

vid L. Gord :j ov r 16, 1976

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I 1 it r po ibl for to

Airli

for ·

t wie for a uee ful conf r ne •

Sine ly,

RMcN:bmm

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oveab r 15, 1976

MEMOIWiDUM lOll MR. \\JDELMAN

1 d 118hted that you 1oitiateci th a riea of aeet1ngs reported in your randum dated October 28. aubjeet: ns~ of Special Me tinge with J.aricultural Staff." And I atronaly agree that the iaauea diacuaaed in the m.-orandUDl «have to be dealt with aore directly and openly than in the paat. • When you are ready to diaeuee how that ad&ht be done, pleaa arrang for a e ting with Meeara. Koappt Baum and llY&elf.

ee: Mr. Knapp Mr. Ia

RMcN:bmm

Robert S. Me amara

NOV 1 5 1~, d

/

Accepted: ----~--~~--~--

Date:

i.