Former secretary of state Henry Kissinger told 120 international bankers here yesterday that the Western democracies should apply to squeeze to the Soviet Union and other Communist countries by attaching "political conditions" to enconomic aid.
Kissinger spoke at a closed-door session of the International Monetary Conference (IMC), an unofficial gathering sponsored by the American Bankers Association. Since 1954, the Conference has brought big bankers together for candid briefings by leading political figures.
His main thesis, Kissinger told reporters later, was that if detente with the Soviets is to have any practical meaning, "it cannot be applied differentially in different parts of the world."
"What the Soviet Union is doing in Africa and parts of the Middle East is incompatible with detente," he added.
Kissinger suggested that to encourage Soviet restraint in foreign policy behavior, "the industrial democracies should develop a code of conduct for both the type of economic relations and the type of political conditions that they want to attach to it."
In a separate interview later, Kissinger said that he would not expect individual banks to withdraw or curb loans to Eastern European countries.
"That would only lead to chaos," he said.
"But you cannot leave credit policy on Eastern Europe to the market, because they first of all do not obey market criteria, and second, it's a matter of profound political consequences.
"Therefore, I did not say what the criteria should be, but it seems to me there have to be political conditions, not so much tied to the domestic behavior as to the international behavior of those countries."
Kissinger added that whatever criteria are adopted, they should be uniform among all the industrial democracies, so one country would not gain at the expense of another's restraint.
In other words, Kissinger said, he favors a policy of "coexistence" with Communist countries, but conditioned to their making concessions to Western views, especially in Africa.
Kissinger, who reportedly received a lecture fee of more than $10,000, also said there are "absolute limits" to the amount of aid the rich nations can give the Third World, and "these limits are far below what is needed."
He said, however, that the rich nations that supply 90 percent of the capital needed by the Third World require a demonstration of "reciprocity." He suggested that continuance of the so-called North-South dialogue will be fruitless if the North is continually "accused" of ill will by the South, and if the South continues to "press themes that they know the [North] will not implement."
Samuel Pisar, an economist and international lawyer based in Paris, said at the same session that more attention should be focused on the weakeness of the Soviet economy.
Pisar told the bankers that to offset the "hawks" within the Soviet Union, the Western world should try to boost the "dovish" element in Moscow by helping to bolster Soviet economic strength. Pisar advocated, for example, increased trade ties and larger Export-Import Bank loans.
Bankers for the most part were noncommittal on Kissinger's suggestion that economic pressures should be applied to the Soviet Union to achieve political aims.
David Rockfeller, head of Chase Manhatten Bank, which employes Kissinger, as a consultant, cited his belief that the Jackson-Vanik proposal, which was designed to spur Jewish emigration from the Soviet Union by linking it to trade issues, had backfired. Kissinger, as secretary of state, strongly opposed the Jackson-Vanik amendment.