In a new indication of the escalating economic fallout from the Persian Gulf turmoil, the head of the World Bank said today that he may be forced to call upon rich nations to boost their support for the international lending institution by early next year.
World Bank President Barber Conable said that if oil prices remain at current high levels over the next three months, his institution would not have enough in existing resources to cushion the shock on the world economy.
Conable's comments represented a change from his position just a few days ago. At that time, he and officials of the the International Monetary Fund insisted that they could handle the economic impact of the gulf crisis with available resources.
However, as delegates from 154 member countries of the two institutions were holding their annual meeting this week, the price of oil jumped at one point to close to $40.
Conable told reporters today that if oil prices stayed at high levels into 1991, he believed it would be necessary to ask for voluntary contributions from major industrial countries and oil-producing nations. That money would be used to make no-interest loans to countries especially hard hit by the rise in oil prices and other economic fallouts from the gulf turmoil.
Other officials of the World Bank suggested that the proposed new lending facility would be available to work with the Gulf Crisis Financial Coordination Group, the steering committee of donor countries unveiled by President Bush in his speech to the IMF-World Bank opening session on Tuesday.
Officials said that donations raised by the crisis group, which is headed by Treasury Secretary Nicholas F. Brady, might be funneled to this new lending facility for distribution to needy countries.