World Bank sources today indicated the State Department has, so far, not indicated any opposition to the granting of a large loan by the Bank to the United Arab Republic, for the expansion of the Suez Canal. The Bank is aware of Israel’s complaints against Egypt’s violations of international transit rights through the Canal by keeping the waterway closed to Israeli shipping.
World Bank sources here said the political question of Israeli transit was a matter that involved the State Department more than the Bank. These sources said the Department apparently decided that the question of the loan to the UAR, and the Israeli complaint, were not necessarily linked.
World Bank executive Joseph Recinsky arrived in Cairo today, with instructions from Washington to discuss aid that would enable President Nasser to expand the Suez Canal into a two-way thoroughfare. (Mr. Recinsky stated on arrival in Cairo that the Bank’s technical experts have reported the project is practicable, and that there is no obstacle to financing the work. Mr. Recinsky will meet with UAR Economic Minister Abdel Monein Kaissouni several times this month.)
The Bank’s final decision will await Mr. Kaissouni’s visit to Washington next month. He will then submit a formal application. Meanwhile, the U.S. Export-Import Bank announced this week-end a $12,000,000 loan to the UAR to buy 58 late-model Diesel locomotives in the United States. The agency said the loan would be repayable over a five-year period beginning in November, 1960.
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