The Profitable Do-Gooder

While the U.S. Congress debates the limitations of foreign aid, a private U.S. firm is boldly helping to develop more than two dozen nations with an unorthodox but simple philosophy: do-gooding and profit-making are not incompatible. The firm is the International Basic Economy Corp., and its proud proprietor is none other than New York's Governor Nelson Rockefeller. Next week, reporting on its isth year of operation, IBEC (pronounced eye-beck) will announce earnings of about $2,000,000 on last year's revenues of $92 million. That is a $1,000,000 comedown from 1961 earnings but, considering what IBEC is and where it operates, it is still an extraordinary performance.

Cheaper Pasta. Rockefeller's IBEC has set itself the task of feeding, clothing and sheltering a good part of the underdeveloped world. To that end, it has invested in ventures that range from manufacturing silks in Bangkok to baking bagels in Caracas. By undercutting inefficient corner grocers, IBEC supermarkets have brought down prices for pasta in Italy and beefsteak in Argentina by 20% to 50%. A personal appeal to Nelson Rockefeller in 1949 brought IBEC into Puerto Rico, where it has alleviated a housing shortage and introduced mass building methods, putting up 8,749 one-family houses that sell for $6,000 each. Beating into backwater towns of Argentina, Chile, Brazil and Colombia to teach the vagaries of "people's capitalism," IBEC stock salesmen have built up flourishing mutual funds, opened fresh sources of money for capital-starved Latin American companies and slowed the drive toward nationalization by spreading public share ownership.

Started in 1947 by Nelson Rockefeller, whose concern with Latin America stems from his family's interest in Creole Petroleum in Venezuela, IBEC at first seemed like just another Rockefeller charity. Nervous currencies, revolving governments and IBEC's own ambitions to do too much too soon left it with losses during its first ten years. The company lost $800,000 on a military-housing job in Iraq after rebels skewered Strongman Nuri asSaid in 1958 and forced IBEC out. It lost another $6,000,000 on ambitious farming, fishing and food wholesaling ventures in Venezuela because of a small market and a creaky distribution system, until it decided to put up supermarkets there. It has become Venezuela's biggest food retailer.

Profit with Honor. Though Rockefeller left the everyday management after he became New York Governor in 1959, he and his immediate family still own a majority of IBEC shares, and his brothers and sister own most of the rest. The company is now run by Robert Purcell, 51, former head of Investors Diversified Services, whose favorite private investment is his half interest in the racing yacht Nefertiti, an America's Cup aspirant. Purcell has guided the company into heavy manufacturing; it now makes hydraulic and pneumatic equipment in France, West Germany and England, auto parts in Venezuela and three-wheeled trucks in Spain. IBEC's usual operation is to use local talent (only 21 of its 7,500 employees abroad are Americans), sell large shares of its subsidiaries to local investors, and show them how to make a profit. "We don't accomplish anything if we have losses," says Purcell. "I'll be disappointed if we don't earn $5,000,000 next year."

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