Chase Manhattan Bank Chairman David Rockefeller said today that developing countries are much more threatened by their debt burdens than they were in 1974 and that rising oil prices will hit them harder as a result.
But Rockefeller, speaking to a Conference Board audience, backed away from a statement in his prepared text that predicted a number of countries will find it impossible to pay off their commercial bank loans on time and will have to "reschedule some portion of their debt to private banks."
Rockefeller deleted a paragraph from his speech, telling reporters that the wording was "too strong" and "exaggerated" what he wanted to say.
In the deleted paragraph Rockefeller had said that he did not find attractive the prospects of additional countries stretching out the length of time it takes to pay off loans although the rescheduling would not create "an insurmountable problem for the international banking system."
In the remarks he delivered, Rockefeller warned that higher oil prices will trigger a slowdown in growth of developing countries that will hit industrialized countries as well because developing countries are major importers. Furthermore, Rockefeller said, slower growth in the developing world will result in higher labor costs for their manufactured exports that will exacerbate inflation in the developing world.
Because of the difficulties many developing countries will face in borrowing from the commercial banking system in 1980, Rockefeller called for substantial increases in multinational and bilateral government lending to these countries.