Top executives of the World Bank and the International Monetary Fund yesterday called for new money and new initatives to cope with an accelerating Third World debt problem.
IMF Managing Director Michel Camdessus, moreover, said the fund "must stand ready" to modify its procedures and guidelines to play a more significant -- and possibly less austere -- role in solving the debt problem.
Barber B. Conable Jr., president of the World Bank, which has been slowed by a controversial reorganization, said that he had "rededicated a renewed World Bank to economic growth and the fight against poverty.
"In pursuit of these goals, I have pledged strong action on debt, firm support for economic reform and adjustment, new initiatives to promote the private sector, and renewed and innovative programs to safeguard the human environment," Conable said.
The bank, he said, "is ready with an agenda for the future, a realistic vision of the pressing challenges to development."
The similarity in focus of the two speeches by the heads of the Bretton Woods sister organizations reflected the partial erosion of the differences in the roles of the bank and the fund. In earlier years, the bank focused on long-term project loans, the IMF on shorter, balance of payments financing.
But the overwhelming nature of the debt problem has forced both agencies to deal with some of the same issues, often in the same countries. For example, Camdessus said, one lesson from recent experience "is that it often takes more time than in earlier 'traditional' balance of payments crises to achieve a lasting recovery."
Another lesson, he said, is that the restraints the IMF imposes on debtors might be more effective if they were not quite so tight.
IMF sources, speaking on background, said that Camdessus, who took over last January, has become convinced that the agency -- no less than the countries it helps -- must change. He also has indicated that despite some resistance -- notably by the United States -- he will push hard for a substantial increase in fund quotas, the money placed on deposit in the fund by member nations.
Camdessus painted a somewhat grim picture of the global economic outlook, noting that growth is insufficient and the prospects remain fragile. "The situation of many of the poorest countries defies description," he said. The latter group, he said, needs a tripling of the IMF's special fund to encourage growth, especially in Africa. Camdessus had already put this request, for a total of $9 billion, to the heads of government at the Venice summit last June.
He stressed that this should not be taken as an alternative to the World Bank's concessional money disbursed through the International Development Association, but would be "mutually supportive." He conceded that even at $9 billion, the special growth fund will still be left "playing only a small role in what must be accomplished in these countries. But that role is crucial ... "
In a separate speech yesterday to the meeting, French Finance Minister Edouard Balladur praised Camdessus' proposal as "the most significant initiative of those to which we must react." But the French support was not duplicated elsewhere. Treasury Secretary James A. Baker III has called on West Germany and Japan to put up most of the extra money, which they have declined to do. The Germans are backing a doubling, not a tripling, of the IMF's growth fund, while Japan has urged that the IMF sell additional amounts of its gold to raise part of the $9 billion.
On the question of the middle-income countries, mostly in Latin America, Camdessus called on the commercial banks "to do more and do better."
Conable set out as a main goal the restoration of the stronger debtor countries such as Brazil, Argentina, Mexico and Venezuela "to spontaneous access to the world's credit markets in five to seven years."