Square-Off in Nairobi

Wielding his familiar giraffe-tail fly whisk, octogenarian Kenyan President Jomo Kenyatta, 85, this week will welcome more than 3,000 delegates from 152 countries to Nairobi's Kenyatta Conference Center--a building that looks like a 350-ft.-tall hair curler. The occasion: the quadrennial meeting of the United Nations Conference on Trade and Development (UNCTAD), a group set up in 1964 primarily to give poor countries a forum in which to air their economic problems. In its three previous gatherings, UNCTAD has produced an elephantine mass of paper but little of substance. UNCTAD IV, which will meet for three weeks, had better achieve something more. At issue is the Third World's increasingly clamorous and potentially disruptive demand for a "new international economic order" that would give less developed countries (LDCs) a bigger share of global wealth.

Reaching agreement will not be easy. Meeting last February in Manila, the organization of LDCS known as the Group of 77 (it has expanded to 110 countries) drew up 17 demands that, if adopted, would thoroughly reorganize the workings of international trade. Some of the proposals are patently impractical, and the U.S. is determined to oppose the "Manila Declaration" pretty much down the line. But UNCTAD Secretary General Gamani Corea, 50, an Oxford Ph.D. in economics from Sri Lanka, would view the conference as a success if it can produce agreement on just two subjects: easing the LDCs' crippling burden of debt, and stabilizing world raw-materials prices.

Mostly because of the high price of oil and of imports from industrialized countries, LDCs have sharply increased their borrowing in the past two years. They now owe an estimated $145 billion to rich nations, to agencies like the International Monetary Fund and to private banks. By the Morgan Guaranty Trust Co.'s estimate, they will have to borrow more than an additional $40 billion this year. Interest and principal payments are swallowing most of the aid that the poor countries get. The Group of 77 will demand that the very poorest countries be granted a moratorium on their debts; that the IMF and similar institutions increase their lending without requiring borrowers to practice various economies at home; that debt-service burdens be eased by stretching out repayment schedules; and that the developed countries double direct aid and low-interest loans, to 0.7% of their aggregate gross national products.

These proposals, on the whole, are unacceptable to the industrialized nations. The U.S. position, with which Japan and West Germany are likely to agree, is that debt crises should be treated on a country-to-country basis. The wealthy nations have already agreed, however, to increase the IMF's lending capacity by more than 30%.

Since Third World countries get more than 60% of their hard currencies by exporting raw materials, they are determined to keep commodity prices stable--and high. For the past few years, prices have been gyrating wildly; producing countries have alternated between brief bonanzas and devastating slumps, and soaring commodity prices speeded the industrial world's runaway inflation of 1973-74.

Agreements of varying efficacy now exist to stabilize the prices of tin and coffee. Secretary General Corea and the Group of 77 want an "integrated program" to cover those commodities and eight others: cocoa, copper, cotton, hard fibers (like sisal), jute, rubber, sugar and tea. They will ask that a $3 billion fund be set up to accumulate stockpiles of each product. An independent group appointed by producers and consumers would be empowered to add to and sell from the stockpiles to keep world prices within a preagreed range.

The U.S. believes, as Assistant Treasury Secretary Gerald Parsky put it last week, that "commodity problems can be dealt with on a case-by-case basis." The U.S. prefers arrangements like the one between the European Community and 46 of its members' onetime colonies, under which commodity-producing nations get special loans if export revenues fall below a certain level. At Nairobi, Secretary of State Henry Kissinger will suggest an International Resources Bank that would borrow money from private firms and governments of developed nations and relend the cash to LDCs to increase raw-materials production.

For all the divergent ideas, a fragile climate of cooperation exists in practice between the rich and poor countries: both genuinely want to make UNCTAD IV a success. The stakes go beyond economics. As Corea warns, the potential "frustration and failure" of the poor countries are not healthy for world peace.

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