Despite renewed hopes for global economic recovery, the Third World debt problem "will not solve itself," leading government officials of the rich nations will be told at a Paris meeting of the Organization of Economic Cooperation and Development early in May.
OECD officials are concerned that, in the wake of the recent decision by member governments to expand International Monetary Fund resources, a sense of complacency has arisen with respect to the debt problem.
"That was stage one, and it was a success," an official said. "But it's just stage one."
What is needed now, according to the OECD, is a stage two that will grapple with the longer term debt problem, "putting refinancing on a more sustainable basis." Stage two also could include further expansion of IMF resources or other official financing, and an examination of bank regulatory problems.
OECD officials believe that Third World countries, with a total debt of more than $500 billion, will have a difficult time financing that debt over the next few years because banks will be unwilling to lend them sufficient money and governments will not have made adequate plans to bridge the gap.
In that circumstance, OECD officials fear, the debtor nations will try to solve the problem by reducing imports from the rich world, which will abort any incipient recovery and encourage protectionist tendencies.
But in dealing with the longer range debt problem, officials emphasized they do not favor debt consolidation schemes, which they suggest would forgive indebtedness by lesser developed countries, or bail out the banks.
"It's a question of putting the 'fire brigades' we've had into a more medium-term context," one official explained. "We have to find a middle ground between debt consolidation and the danger that there might be no financing available at all to the LDCs."
The OECD ministerial session will take place May 9 and 10, a prelude to the economic summit in Williamsburg May 28 to 30. The Paris session will be attended by Secretary of State George P. Shultz, Treasury Secretary Donald T. Regan, Commerce Secretary Malcolm Baldrige, Trade Representative William Brock and their counterparts in other industrial nations.
A central theme will be increased emphasis on the growing links between financial policy and the trading system--links that OECD officials think have been ignored until recently. In the past, OECD ministerial sessions have not always been attended by Commerce Department or trade officials.
"All of these borrowing nations have been told to reduce their trade and current account deficits," an official said, "but it's obvious that not all of them can do that at the same time. We've got to look at a world where it will still be possible for the savings in the rich world to move to the poor."
A joint policy by industrial nations on the debt issue might also be formulated at the Paris session, in preparation for a discussion of these problems at a meeting in June with the United Nations Conference on Trade and Development (UNCTAD) in Belgrade, OECD officials said.
At the Paris meeting, OECD economists also are expected to project a modest recovery in the United States and Japan, as well as some pickup in Europe, during the next 18 months. Helped by the momentum of recovery in the United States, the statistical picture is expected to be slightly brighter than calculated by OECD at the end of 1982.
A negative factor is that OECD exports are expected to be somewhat lower, both because of the LDC debt situation and reduced oil prices, which could limit the ability of oil-producing countries to maintain their imports from the West.
Their main macroeconomic concern, officials say, is that the economic recovery they foresee could be aborted if interest rates in leading countries like the United States, which face large budget deficits, do not come down.