Treasury Secretary Donald T. Regan assured members of a House committee yesterday he will make sure that U.S. executive directors for the World Bank and related lending programs will "represent our interest" and won't become their "captives."
Reacting to congressional pressure for a further reduction in U.S. participation in the lending programs, Regan reiterated the administration position that it will fulfill present commitments to the multilateral development banks but undertake no new "replenishments" until a full-scale review is completed of what these banks are accomplishing.
Nonetheless, Regan was uged persistently by Rep. Clarence Long (D-Md.), chairman of a House Appropriations subcommittee on foreign operations, and Rep. Jack Kemp (R-N.Y.) to prune commitments for fiscal 1982 even beyond the 26 percent cut included in Carter's proposals.
Lashing out at all foreign aid programs as ineffective in dealing with poverty, but a device for "making millionaires all over the world," the committee chairman thundered:
"In those [development] bank, some mousey little gal is sitting in the corner, stealing millions of dollars." He asked Regan for "assurance" that the Reagan administration would investigate to "guard against corruption and semicorruption."
Long told Regan that, in general, foreign aid is wasteful, recalling what he said was "the old joke" to the effect that "foreign aid is a device for taking money from the poor people in rich countries in order to give it to the rich people in poor countries."
He singled out Haiti for special attention, saying it is losing people steadily to Puerto Rico. "Ultimately, we are going to get most of the Haitian population [here] unless we take charge there," Long said.
It was in response to Long that Reagan promised to give specific orders to American executive directors to make sure they don't become captives of such institutions as the World Bank and the International Monetary Fund. "We'll look on the executive directors as watchdogs, who [will] give us a thorough accounting," the Treasury secretary promised.
Kemp said the need "to rein in" multilateral bank programs in a manner similar to cuts made in domestic programs "is so important that I gave up a $5,000 honorarium in Florida just to be here today." (He later said in answer to a colleague that he could accept such an honorarium with the intent of giving it to a charity.)
The New Yorker insisted that the Reagan administration had made a mistake in approving $3.2 billion for the World Bank's soft-loan arm, the International Development Association (IDA), while all Organization of Petroleum Exporting countries members together were advancing only $700 million. A soft loan is one made at a subsidized rate.
"We have some fear that [making] 30- to 50-year loans through the soft-loan window to the Third World is not the way to go when we are trying to signal a break with the past," Kemp said.
Warning of a $500 billion debt "overhanging the Third World," he called for reconvening a Bretton Woods-type conference to find a new way of developing run-down areas "using a world unit of account on which they can depend." (The original Bretton Woods conference, in 1944, established the World Bank and the IMF.)
Regan responded by saying that it would be counterproductive to alienate our allies as well as the less-developed countries, who had relied on the Carter administration's committment, by cutting or stretching out the present level of funding any further. He stressed, as well, that continued participation in the World Bank, IMF and other institutions has a close tie to U.S. "national secuity interests."
But the secretary seemed in tune with the longer-range thrust of Kemp's complaint that the economic health and stability of poor nations had not been notably improved by recent lending operations of the international institutions.