CONABLE WARNS PROTECTIONISM MIGHT SPREAD

  World Bank President Barber Conable
  expressed concern that trade protectionism, at the heart of a
  new showdown between the United States and Japan, might spread
  throughout the industrial world.
      But in an interview with Reuters, Conable said the action
  by the United States to slap tariffs on certain electronic
  goods from Japan did not mean the countries were heading for a
  full-scale trade war.
      Conable said the World Bank has been pressing developing
  countries to open their markets, arguing that a free trading
  environment increased the possibility of global economic
  growth.
      "We have, in fact, been making adjustment loans to many
  countries in the developing world which have encouraged the
  opening of their markets and we want to be sure that the
  developed world doesn't close at the same time," he said.
      He said the U.S. action against Japan was "a significant
  retaliatory step but it did not constitute a basic change in
  trade policy."
      The interview came just before next week's semi-annual
  meetings of the Bank and the International Monetary Fund.
      Referring to Brazil's recent interest payments moratorium,
  Conable also said the global debt situation was very serious
  and must be closely watched.
      He said the Bank, which in the past has concentrated on
  making loans that assist the basic underpinnings in the
  developing world such as dams, roads and sewers, will
  increasingly make assistance available for economic reform.
      The Bank has increased these loans, in part because of the
  debt crisis that has found countries desperately in need of new
  funds for balance of payments adjustment and economic reforms
  aimed at opening their markets, encouraging foreign investment
  and reducing government's role in the economy.
      "We're comfortable with adjustment lending, we expect,
  however, that it will never reach a majority of our portfolio,"
  Conable said.
      He made clear, however, that adjustment lending would
  continue to increase as a proportion of overall Bank lending
  for some time.
      He noted, "the problem of debt was a severe one and many
  countries are asking for adjustment assistance because of the
  problem of debt."
      Conable, is a a former Republican Congressman from New York
  chosen by President Reagan for the Bank position last year. He
  is an associate of Treasury Secertary James Baker who launched
  the U.S. strategy for shoring up indebted nations in October,
  1985 which included a call for increased adjustment lending by
  the World Bank.
      Conable also said that he expected the result of a major
  study of the Bank's organization to be completed in the next
  several weeks.
      He said the decision to seek a reorganization was based, in
  part, on the fact that the Bank had come under fire from the
  poorest countries for not doing enough to help and from the
  richest countries because of inefficiency.
      the reorganization is considered a major initiative by
  Conable, and is being closely-watched by the agency's 151
  member-countries as an indication of his management style and
  priorities.
      "I want to be sure this institution is viewed by those who
  must support it as soundly constituted so that it will be
  permitted to grow," Conable said.
      However, he said "I don't believe there is anything
  basically wrong with this institution and I don't believe it
  has to have any redefinition of its purpose."
      He said, however, that it was apparent that the debt
  initiative proposed by Baker has given the Bank a central role
  in dealing with the debt crisis.
      Conable added that cooperation between the Bank and its
  sister agency, the International Monetary Fund, was good and
  that he talked often with IMF Managing Director Michel
  Camdessus on a variety of issues.
      On a personal level, Conable said that he not feel a need
  to put his personal stamp on the Bank noting that "I don't have
  a particular mission here except to be useful to the
  institution and to the process of development."
      He added, "so I don't feel a great calling to personalize
  the institution."
      On the development needs of sub-Sahara Africa, Conable said
  that the Bank was constantly reviewing new ways for assisting
  the region, noting that half of the recently agreed financing
  of 12.4 billion dlrs for Bank's International Development
  Association was earmarked for Africa.
      Leading industrial nations are expected to consider new
  forms of debt relief for the very poorest nations, like those
  in the Sub-Sahara, during next week's meetings.
  

