The World Bank recently invited a few dozen journalists to this secluded estate for several days of low-key propagandizing. The timing was excellent.
Only the week before, Robert S. McNamara -- a former Defense secretary who has been World Bank president since 1968 -- unexpectedly had announced his retirement for 1981, raising the slight possibility that his successor might be the first non-American. And, at the same time, Congress was dilly-dallying over the latest $3.2 billion three-year contribution to the bank and had cut pledged U.S. contributions to smaller regional development banks. a
Taken together, these events symbolize the waning American interest and influence in international organizations such as the World Bank, just when their importance is likely to rise.
Huge oil price increases have created new needs for international mechanisms to do two jobs: First, to recycle the staggering surpluses of oil revenues (estimated between $100 billion and $120 billion in 1980) from producers to consumers; and second, to coax or coerce countries into making practical changes to prevent oil scarcity from suffocating global economic growth.
Most Americans aren't likely to see things this way. If they've heard of the World Bank, they probably think of it as a glorified international antipoverty agency, staffed by an overpaid international bureaucracy. Americans feel increasingly hostile toward such overseas charity. When a recent poll asked what should be cut from the federal budget, more than four-fifths of the respondents answered by citing foreign aid. This includes World Bank appropriations.
As usual, we have a knack for poor timing. Private banks probably won't play the same role in recycling surplus oil funds that they did in the 1970s. The slowdown in Western economies -- prompted by oil price increases and inflation -- probably will reduce world trade, which in turn will make banks more jittery about expanding their loans to developing countries. Without exports, these countries won't be able to generate foreign exchange earnings to service their growing debts.
You might argue that we'd actually be better off if the developing countries were squeezed out of recycling altogether, leaving more fuel for the rich.
But, even in the name of self-interest, this cruel approach probably won't work. The slackening of demand from the developing countries for Western exports (about one-quarter of U.S. exports go to non-oil-producing developing nations) risks deepening our slowdown. And, ironically, this is likely to increase the already considerable political leverage of the oil producers. The less money that is funneled through private banks and international organizations, the more the oil countries will be able to make direct government-to-government deals (for loans and oil) to desperate consumers.
In the World Bank -- and its sister organization, the International Monetary Fund -- the United States has about one-fifth of the vote. Even if the oil producers' influence grows in these groups (as it should, if we expect them to participate), it will be blunted both by the presence of industrialized countries and by an entrenched professional bureaucracy.
Not that the World Bank's image as an antipoverty agency is a false one. When McNamara was asked what qualities his successor ought to have, the first on his list was commitment.
Bank officials repeatedly tick off the grim statistics: Of the 2.25 billion people living in developing countries, 900 million are said to live in "absolute poverty." That's a condition of almost constant malnutrition and a life expectancy 30 percent lower than the low average of developing nations.
But the bank is not quite the international giveaway that most people probably suppose. In fiscal 1979, about two-thirds of the $10 billion in new spending commitments were legitimate loans. The bank borrows money by selling its own long-term bonds and lends for 15 to 25 years at an interest rate at least half a percentage point above its borrowing costs.
The rest of the money -- which goes to the poorest countries -- comes from the bank's International Development Association (IDA) as 50-year interest-free loans. Governments contribute IDA funds, and it's the U.S. portion that Congress so far has declined to vote.
The IDA aside, the preponderance of legitimate lending activity underlines the bank's potential for an increased role in recycling. Funds can -- and should -- be increasingly borrowed from oil producers. What's critical is that loans to developing countries be used to make the long-term adjustments necessary to sustain economic growth in a world of high-priced oil.
The top item here is to find more oil. Normally, higher oil prices would prompt a flurry of new drilling. But in most developing countries, which are the least explored parts of the world, oil companies fear they face a no-win situation. They lose if they don't discover oil, and they lose if they do because their holdings are expropriated.
The World Bank may be able to surmount some of these problems. It already has begun a program of oil and gas exploration that is expected to total $1.2 billion in 1983. Based on current projections, the contribution to total world oil production will be modest. But anything will help poorer countries, and there's always the remote possibility of a huge discovery, another Mexico.
All new finds are in our interest, because they relieve strains on world oil markets. It no longer is going to be possible to justify support of the bank simply as a part of a moral crusade. The bank officials here do not leave the impression that they have discovered the secret for ending world poverty. Precisely the opposite.
Even in telling success stories, they betray frustration. Outside money can help, but local conditions -- the decisions of local governments, the quality of local farmers and workers -- determine success and failure.
But they do leave the impression of competence. The problem for the 1980s is mostly to prevent things from getting worse. It won't be easy to convince oil producers to rely on organizations such as the bank that have a heavy Western orientation. They may want new organizations where their power is less diluted. Or they may prefer chaos. But Americans ought not make the job any tougher by weakening the World Bank.