When Robert S. McNamara steps down as president of the World Bank on July 1, to be succeeded by former Bank of America boss A. W. Clausen, it will mark the end of an era in more ways than one.
For the past 13 years, the sprawling International Bank for Reconstruction and Development (the formal name) has uniquely been "McNamara's Bank." reflecting the Vietnam-era defense secretary's deep and emotional commitment to the problems of the Third World, and the eradication of poverty in the poor nations.
When McNamara moved from the Pentagon to the bank in 1968, the bank was lending less than $1 billion in hard and sofe loans together. At $11.5 billion in new loans in 1980, the bank had become the world's largest supplier of development money.
But the enormous growth of the World Bank's scope, of which McNamara is so proud and which he believes must continue over the decade of the '80s, is precisely what gives the jitters to a multiplying band of conservative critics, many of whom have come to power under Ronald Reagan.
As a friendly critic of the bank, Robert Ayres of the Overseas Development Council points out the conservative worry goes beyond a objection to the size of bank lending to concern over the "qualitative re-oreintation" of the bank under McNamara. Moreover, influential Reagan advisers charge that although the United States has the biggest single money stake in the bank, the management is not sufficiently influenced by the United States, and that the bank therefore is not an efficient agency for carrying out U.S. strategic policy aboard.
The "qualitative" change under McNamara is clear enough. Under his guidance, the bank starting in 1973 began to focus on rural development, world poverty, population control, slum uprgading, health and nutritional activities. This move away from the bank's initial, post-war emphasis on more traditional projects seems to frighten the conservative community, which regards the newer trend as social experimentation -- or to be less polite, a bottomless international welfare program.
Early on, OMB director David Stockman attempted to get the administration to revoke the Carter administration's pledge of $32.2 billion for the World Bank's soft-loan agency over the next three years. After a bitter fight, the State Department succeeded in re-instating the $3.2 billion on a stretched-out basis. But privately, key officials tell this reporter it is doubtful there will be another U.S. "replenishment," after the $3.2 billion is used up.
Whether the bank or any other multilateral agency should be considered a vehicle for carrying out the foreign policy of the United States or any other nation is a separate issue. That has never been the view of preceding administrations, and is certain to be fought by America's partners, and within the bureaucracy of the bank itself.
In a Post interview that caused tremors in the less developed world a few weeks ago, Treasury Under Secretary Beryl Sprinkel publicly expressed his doubts whether the World Bank is serving U.S. interests, and wondered whether the bank's government-to-government mode of operation did not encourage socialism at the expense of the private enterprise system.
McNamara, as he moves back into private life, is deeply disturbed at what he regards as a senseless attempt to undercut the bank. He rejects the "socialism" charge as uninformed.His main concern is that the world is up against a serious "financial disequilibrium," and that presidents and prime ministers are not facing up to that reality.
Among McNamara's chief disappointments is the determination of the Reagan administration -- so far at least -- to abandon a proposed "energy affiliate" for the World Bank, even though the Carter administration supported the plan at the Venice summit last year. The energy affiliate, which is sure to be debated again at the Ottawa summit next month, would promote production of oil and other energy sources in the less developed world.
Although the Reagan crowd clearly is hostile to the energy affiliate, Clausen (who always talks on the record) didn't hesitate to tell me in an interview June 4 in Lausanne, Switzerland, that he is "attracted" to the idea, which he thinks would be highly successful in raising money for energy development in the Third World.
Clausen is well aware that there is hostility to the bank inside the administration, and outside among some of the more ideological pro-Reagan extremists who keep up a drum-fire for way out economic solutions. He knows, as well, that some of these conservative forces would have preferred as McNamara's successor someone like former Treasury secretary Bill Simon, committed to reining in, not expanding, the bank's role.
Clausen, however, does not appear to have taken the bank job to preside over its dissolution. He told me that he favors expanding the present "gearing ratio" of the bank, which presently limits the amount of outstanding loans to the ultra-conservative one-to-one ratio with total capital. He exudes the confidence befitting the former head of the world's largest commercial banking enterprise. But Clausen faces a determined anti-bank mind-set in Reagan's Washington that will test not only his skills, but his innate good humor.