"The world," says former World Bank president Robert S. McNamara, "is better off with the Mexican summit at Cancun than without it. You know, you have to take small steps. And I think this is a small step. . . . I hope it will (turn out to) be a larger rather than smaller step, but it is a step forward."
Thus advocates and sponsors are already conceding that the most important thing about Cancun is that the Oct. 22-23 meeting of the political leaders of the rich nations of the north and the poor nations of the south will actually take place, not that it is likely to achieve any important result.
The die was cast against any significant outcome when President Reagan refused at the Ottawa summit to buy Canadian Prime Minister Pierre Trudeau's proposal for "global negotiations" on increased governmental aid to the Third World.
Reagan made clear there, and then re-emphasized last month when he addressed the World Bank-IMF meeting here, that the United States basically believes in a bootstraps-up approach for the poor countries. If they simply trust "the magic of the marketplace"-- as the United States and Canada did in the 19th century--they too can enjoy riches and prosperity, he said.
If the president really trusted the marketplace, he would propose at Cancun the abandonment of textile quotas that inhibit Third World progress. But since that would throw American companies into a tizzy and create a panic in Europe, that won't happen.
Reagan talks of a kind of extension of supply-side economics to the world at large. In keeping with his rose-colored view of the corporate world, the president has faith that if underdeveloped nations drop their hostility to foreign investment and investors, and allow sufficient incentives for capital to come in, the private enterprise system can solve most of their problems.
One cynical Democratic Senate staffer calls it a "new supply-side imperialism." She notes that in some of the poorest of the poor nations, there are no private sectors. McNamara and his World Bank successor, A. W. Clausen, of course acknowledge the potential for private business if they share the fruits of investment, and if they get basic assurances from host countries. But they know that certain elements of development aid can only be managed and financed by governments.
President Reagan and his team will be going to Cancun arguing against the creation of any new institutions or schemes to help the Third World. They support, instead, the existing loan and grant system operated by the World Bank and the IMF.
Third World leaders have every right to be cynical about this approach, coming, as it does after the administration systematically set out to clip the wings of both the IMF and the World Bank at the Washington meeting. Finance ministers of some 140 nations left Washington with clear evidence that the United States is planning to reduce its relative commitment for subsidized 50-year money for the poor nations through the bank's soft-loan affiliate.
All of these developments are exceedingly disappointing to moderate Third World leaders who had actually hoped that something tangible would come out of Cancun. They did not take kindly to Undersecretary of State Myer Rashish's use of the phrase "so- called poor nations" in a New York Times interview on Aug. 7, in which Rashish brushed aside as impractical the package of demands put forward by the Third World.
Among the demands are greater access to the rich world's markets for the poor nations' exports, higher prices for some of their commodities, a greater flow of grant and aid money and a re-shaping of the IMF that would give the poor nations not only more voting power but more of the IMF's "paper gold"--the Special Drawing Rights, a credit issued by the IMF to members that is exchangeable for hard currency.
Rashish's rejection of the Third World package was exactly in tune with the Reagan administration line. But the "so-called poor" reference-- among other things--appears to have placed his job in jeopardy. Secretary of State Alexander Haig had been trying to present a somewhat more accommodating and sympathetic public line than the purist private-sector approach of the Treasury Department.
Moderate Third World spokesmen such as Cesar Virata, prime minister and finance minister of the Phillippines, come away discouraged. Virata had been looking forward to some progress at Cancun, not a repetition of the fruitless confrontations at the United Nations in New York.
The rich nations, Virata says bitterly, can in effect print their own money. But the poor nations need that "paper gold" to help pay off their debts for high-priced oil.
As a minimum, the poor nations at Cancun will look for more aid, especially in developing more of their own energy, and to break down the trade barriers set up by the rich. But the prospects, Virata and his colleagues know, are far from bright.