The hotly debated question of giving the Palestine Liberation Organization observer status at the forthcoming joint annual meeting of the World Bank and the International Monetary Fund remained undecided last night after a complicated day of tactical maneuvering by the United States, which opposes admitting the PLO, and Arab nations that support the move.
But late last night it appeared that unless the United States can overturn a decision by the World Bank and the IMF in the next four days, the decision on whether or not to admit the PLO will be made at the annual meeting.
In that circumstance, a pro-PLO vote among the 140 nations is considered a probability. This would be a major defeat for the United States, which has been waging a last-ditch fight to keep the PLO out of the meeting.
The sequence of events yesterday and last night was as follows:
A resolution passed earlier by the boards of directors of both institutions, which barred the PLO at the upcoming meeting, was sustained by the boards of governors after a strenuous lobbying effort by the U.S. government. b
A top administration source said "We threw everything we had into it."
But the Arab nations then requested that both the IMF and the World Bank put the question of PLO admission on the agenda of the meeting itself. bThis request was granted.
The United States, reluctant to see the meeting preoccupied with the divisive PLO question, then asked for a four-day period of grace during which it can try to get the IMF and the bank to change their minds.
Officials last night were uncertain whether or not the latest American request would be granted. The World Bank, the IMF and U.S. Treasury Department all declined to comment beyond saying that official statements would be issued Monday.
Key Treasury officials met in Secretary G. William Miller's office last night to map a strategy that might smoot over the tangled situation and still keep funds moving into the two lending istitutions.
By an overwhelming vote earlier this week, the House of Representatives amended a bill providing for the regular U.S. contribution to the IMF, so that acceptance of the PLO "would result in a serious dimunition of United States support."
On the other hand, wealthy Arab backers of the PLO -- particularly Saudi Arabia and Kuwait -- have told IMF managing direrctor Jacques de Larosiere that they will not make further loans to the IMF unless the PLO is granted observer status. The Saudis have held up a $402 million loan to the World Bank in an effort to force the bank and the IMF to change their minds on the PLO issue.
At high U.S. government levels there is the sense that even if some temporary compromise is found on the PLO question, a politicization of both institutions has been introduced that will interfere with normal operations for a long time.
"It's very damaging," a frustrated IMF official confessed. "I don't think that either side thought the situation would become so embittering. No one intended to let it go so far. But here we are in the frying pan, and no one seems to know how to get out."