World Bank Faces New Demands Outgoing President Sees Need for Developing Countries to Slash Excessive Defense Spending. INTERVIEW BARBER CONABLE

Article excerpt

AS he steps down from a five-year tour as president of the World Bank, Barber Conable surveys the state of the the world's poorest nations - the ones he has labored most to help.

"I believe their condition is better today than it would have been if we weren't here," he says of the giant lending institution that last year alone pumped over $6 billion into third world economies. "I think we gave them some reason for hope."

But behind this guardedly upbeat retrospective lies the grim reality of 1 billion people held in poverty by forces that threaten to overwhelm the Bank's limited capability to assist.

"Eight hundred fifty million poor people will be born into the developing world between now and 2000. That's nine out of every 10 people born," says Mr. Conable. "No issue poses such a crucial barrier to development."

Soaring birth rates have hit sub-Saharan Africa worst, overwhelming the modest economic growth achieved during the past few years. The result, says the former New York Congressman: 100 million more Africans will live in absolute poverty - that is, on less than $1 per day - by the end of the decade.

"It's pretty obvious that population must be addressed if poverty is to be significantly reduced," says Conable in a Monitor interview.

Conable became president of the World Bank in 1985 and retires on Aug. 30. He will be succeeded by Lewis Preston, former chairman of J. P. Morgan & Co.

The sagging economies in Africa and Latin America, plagued by high birth rates and huge external debts, have been the most formidable challenges the World Bank has had to cope with under Conable's leadership.

But competition among countries for the money needed to alleviate poverty has grown far faster than the Bank's gradually expanding lending capacity, which now totals more than $22 billion.

In fact, the demands on the Bank have never been greater since its founding in 1945 to forge economic cooperation out of the havoc produced by World War II.

The newest call for World Bank support has come from the Soviet Union, where incipient economic reform has produced a huge demand for outside capital and technical expertise.

On Aug. 27 the Bank was expected to approve a $30 million trust fund to finance technical assistance for restructuring Soviet industries and creating a new financial sector. Conable expects the pool to expand with outside contributions.

"Our interest is in improving the quality of life there not through subsidizing consumption but by getting more efficient organization to permit economic growth," says Conable.

The collapse of the command economies of Central and Eastern Europe has created other new demands as seven nations in the region have initiated or renewed applications for membership in the world body. About 20 percent of the Bank's resources now go to former communist-bloc nations.

Conable says Czechoslovakia, Hungary, and Poland - the so-called "vanguard countries are at the forefront of market reforms. Poor nations in Asia and Africa say the diversion of Bank funds to hasten the transition from communism in Europe has hurt the Bank's ability to respond to their own more pressing needs.

The Bank was also called on to provide support to nations hard hit by the temporary increase in world oil prices caused by Iraq's invasion of Kuwait a year ago.

The Bank was a funnel for money raised internationally by a United States government-led Gulf Crisis Financial Coordination Group. Almost all of the crisis-affected countries, he says, are now "in pretty good shape."

Beyond the collapse of communism and one-shot crises like the Gulf war, there have been new demands of a different nature under Conable's tenure. …