DIPLOMACY: Toward a Third World Bank

It was the very model of a modern diplomatic safari to black Africa. There was a forceful policy speech reading the riot act to southern Africa’s white minority regimes, friendly talks with black moderates and a long tēte-å-tēte with Senegal’s Poet-President Leopold Sen-ghor—not to mention the prescribed attack of gastroenteritis, glimpses of giant cape buffalo bellowing in the moonlight and a cargo hold full of souvenirs in the big U.S. Air Force 707. Then Henry Kissinger, increasingly caught in the political crossfiring back home, climaxed his two-week African tour with a series of sweeping proposals to help bridge the gap between the world’s rich and poor.

The setting was the elegant Kenyatta Conference Center in Nairobi, where 3,000 delegates from 124 countries had gathered for the quadrennial meeting of the United Nations Conference on Trade and Development (UNCTAD). Kissinger had earlier come out in support of a $7.5 billion development project to “turn back the desert” in the drought-stricken Sahel region of West Africa. His Nairobi speech laid out a comprehensive program to deal with the fundamental problems of development in poor lands everywhere. His recommendations included plans for:

> Sharing in American satellite technology, which can be useful in forecasting crops, evaluating natural disasters and improving land use.

> Formation of an American technology corps to work with local personnel in development projects.

>Reduction of tariff barriers between rich and poor nations.

>A commitment to help stabilize prices of basic commodities by producer-consumer conferences.

The centerpiece of Kissinger’s speech was a billion-dollar International Resources Bank, designed to encourage increased private investment in developing nations, particularly those that international companies might ordinarily consider poor business risks. The bank’s essential features would be that it could be used as a mechanism to stabilize prices of commodities and guarantee investments. In Kissinger’s view, such a bank, which would be financially backed by the industrialized and oil-producing countries, would serve as a conduit between private foreign investors and host countries, handling key negotiations, including fair profit-sharing arrangements.

Ongoing Dialogue. Kissinger’s speech was an important step in keeping the dialogue going that Washington initiated with the Third World at the U.N. last fall. Still, it fell short of meeting the proposals the Group of 77, as UNCTAD’S working caucus is called, drafted at its February meeting in Manila.

The Group had urged, among other things, acceptance by consuming countries of a plan to link or “index” prices of raw materials to increases in the cost of industrial products—an arrangement that might only fan worldwide inflation. The Group had also wanted a general debt rescheduling for the poorest countries; largely because of rising oil prices, their international borrowing has soared in the past few years, burdening them with heavy debt payments. Kissinger argued that the new bank would help take care of the commodities problem. Debt rescheduling, he said, should be handled on a case-by-case basis.

Given the intricacies of the proposals, reaction was generally cautious, although on balance favorable. Said a Kenyan official: “What’s important is not Kissinger’s specifics right now, but the evidence that the U.S. seems sincere about helping us with our crushing problems.” Added an Iranian delegate: “Kissinger went a long way toward meeting the position of the poor nations.”

The Secretary’s proposals will not become concrete programs overnight.

The U.S. contribution to the resources bank—$200 million—would have to be appropriated by Congress, for example, and other Western participants would have to get similar domestic approval. Kissinger himself foresaw “several weeks of discussion [at UNCTAD], some of which could become quite acrimonious, because there are many nations here that do not agree with our approach, which stresses free enterprise and individual initiative.” But at the minimum, he could add, his proposals would keep the wary, halting but vital, new dialogue between rich and poor nations going.