Conable Calls for Speedy Action to Avert a Worldwide Recession
World Bank President Barber B. Conable called for the industrial nations and developing countries to accelerate their economic adjustments in order to “move the world back from the brink of a deep recession.”
Conable said that without coordinated international action to reform current fiscal, monetary, credit and commercial policies, Third World countries are headed for economic disaster that won’t stop at their borders. Signs of a spill-over effect from Third World nations already are appearing, said Conable.
He added that it is already evident that the industrial nations are hurt from a loss of export sales when developing countries cut back their imports, as they have done over the last five years, due to heavy foreign debt and low economic growth rates.
In remarks prepared for a meeting in Geneva of the United Nations Conference on Trade and Development, Conable listed five courses of action for industrialized nations:
- Progressive budget reduction in the United States.
- Determined stimulus of economic growth rates in the “surplus economies” of Europe and Asia.
- Currency “stabilization” by the powerful monetary nations.
- Innovative debt relief for the “most distressed” Third World countries and substantial new capital to developing nations from both the private and official lenders.
- Worldwide trade liberalization.
Conable also criticized the United States, Japan and the 12 governments of the European Economic Community for spending $60 billion a year to support prices, control production and subsidize exports.
“Their policies not only cost producers in developing nations sales at home and abroad,” he said. “These practices often entail the very market restrictions that the developing countries are urged to reform. Advice will not be credible until it is followed at home by those who offer it most ardently abroad.”
The European countries are: Britain, France, West Germany, Italy, Belgium, the Netherlands, Luxembourg, Ireland, Denmark, Spain, Portugal and Greece.
The World Bank is the biggest source of loans to Third World countries--a record $17.6 billion in the last 12 months. The United States is the biggest contributor and holds the largest block of shares.
