ONE QUARTER of everything produced in the world is now traded across national borders," A. W. Clausen, the president of the World Bank, observed the other day. He was talking about the developing countries' debts and the importance of not treating them as a crisis. He's right about that. While the debts are unprecedented, they are financing flows of trade and commercial expansion that are also unprecedented.
The right response to concerns about the Third World's debt, as Mr. Clausen also observed, is to encourage the rapid expansion of trade with them. "The clearest lesson that emerges from the development of the Third World nations is that openness to foreign trade encourages efficiency, adaptability and growth," he said. He might have added that the same lesson emerges in the First World as well.
One of the most disquieting things about the debt question last year, and a great contributor to the bankers' bad nerves, was the realization that no one had even approximately accurate figures on who owed what to whom. The International Monetary Fund, the World Bank's sister across 19th Street, provided some interesting numbers earlier this winter. Now the World Bank has published a detailed tabulation of medium- and long-term debt for nearly all of the Third World countries. The total currently runs a little over $600 billion, a third of it to the three biggest borrowers--Brazil, Mexico and Argentina--and another third to 10 other countries, all of which have substantial resources. On the whole, the pattern is reassuring. It confirms the earlier impression that the large debts are carried by countries with vigorous economies that can carry them--as long, Mr. Clausen would quickly add, as a recovery gets under way and the protectionists don't win in places like Washington and Brussels.
Closing borders to imports is supposed to save jobs --although it doesn't. Without trade there won't be much economic growth for any country. But there is an undercurrent of hostility, here and there in this country, much more explicitly in Europe, to the idea of continued growth. It's disruptive. Why bother?
The simplest answer is that people's lives depend on it--and not only in the Third World. In this country, life expectancy generally rises with the GNP. In less fortunate places, the connection between the two is immediate. Falling incomes there are quickly reflected in malnutrition, disease and infant mortality rates. In talking about dry subjects like bank loans and trade, it's always useful to remember they touch far more than money.