World Bank President A.W. (Tom) Clausen yesterday sketched out plans for "a closer partnership" between the multinational lending agency and the private international banks to enhance further economic development in the Third World.
In a speech to a private international monetary conference in Vancouver, British Columbia--an address touted by officials as a major policy initiative--Clausen said that the World Bank could help stimulate greater private investment in the developing world by a number of means, including a multilateral insurance plan that he first mentioned at last year's annual joint meeting of the bank and International Monetary Fund.
The Vancouver conference is sponsored by the American Bankers Association. A copy of Clausen's speech was released here.
Other areas of the "partnership" that Clausen mentioned include expanding the co-financed projects already being undertaken by the bank and commercial lenders, and beefing up the International Finance Corp, the World Bank affiliate that promotes private enterprise in developing countries.
This new focus of the bank on the private sector dovetails neatly with the expressed wishes of the Reagan administration, which feels that its financial support of all of the multilateral lending agencies can and should be reduced if private companies are encouraged, rather than discouraged, to participate in the process.
"Our objectives in taking these initiatives is not to help commercial banks make more money--although we think they will," Clausen said. "The fundamental objective of the World Bank is to help raise the standard of living of people--especially poor people--in the developing countries."
Ten days ago at a meeting of the joint IMF/World Bank Development Committee in Helsinki, Clausen came under great pressure from the Third World countries to assure that there would be a continued flow of funds from the World Bank, especially from its soft loan affiliate, the International Develepment Agency. Clausen had to warn them that the industrial nations are operating under severe budgetary restraint, and that it is difficult to maintain the flow, much less increase it.
His resort to a "partnership" with commercial banks appears to be an effort to keep the flow of development aid going in one way or another. He pointed out to the assembled international bankers at Vancouver that at least some of the developing countries "are solid credit risks, and nearly all of these countries are replete with attractive investment opportunities."
He said that the IFC is set to expand not only into the more advanced developing nations where it has been active for the last 25 years, but increasingly into sub-Saharan Africa. Clausen did not give details of the insurance plan, or new co-financing techniques, but said that some options will be presented to the bank's executive directors within the next few months.