Magazine article American Banker

New World Bank Chief Wants to Boost Lending to Developing Nations

Magazine article American Banker

New World Bank Chief Wants to Boost Lending to Developing Nations

Article excerpt

New World Bank Chief Wants to Boost Lending To Developing Nations

World Bank President Barber Conable, in his first address since taking office, said Wednesday he wanted to expand loans to developing countries but that the effort should't be read as an effort to "bail out' commercial banks.

Mr. Conable, 63, also endorsed the Baker initiative, a plan sponsored by Treasury Secretary James A. Baker 3d to boost credit from both the World Bank and private lenders to indebted developing nations.

His role will be to help "worry' the plan along, he said. "I expect I'll spend the next five years in meetings.

"The fact that the Baker plan was introduced nine months ago doesn't mean it's a failure,' he added.

Under the plan, commercial banks worldwide would lend another $20 billion, with multilateral institutions such as the World Bank adding another $9 billion.

But banks have extended no major new loans since the Treasury Secretary's call.

Additional World Bank loans and the Baker initiative should not be seen as a "bailout' for anybody, Mr. Conable said, but "as an effort to promote development.'

Andre de Lattre, director of the Institute for International Finance, said Mr. Conable may be able to help revive the Baker initiative. The institute is an information resource on international lending for the commercial banking industry.

On Mexico's "troubles,' Mr. Conable said he assumed the nation would be "forthcoming' in adopting reforms as a condition for new loans and new loan terms. The nation shoulders $98 billion in debt. "I'm unwilling to think that Mexico will be suicidal.'

But he stressed the reforms must be "accepted' by the Mexican people. "Obviously, conditions imposed from the outside have been wrong.'

Commenting on the new World Bank leader's remarks, Mary Condeelis, executive director of the Bankers Association for Foreign Trade, said, "He's pretty much right. …

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