Clausen's Debut

A new boss at the World Bank

Timidity was hardly his trademark during eleven years as the head of San Francisco's Bank of America. Yet when A.W. (Alden Winship) Clausen, 58, moved into the president's office of his latest assignment last Wednesday, he sounded properly cautious. Said the new leader of the $40 billion World Bank: "I'm not a hip-shooter. I do my homework."

Clausen's mandate is anything but clear. Though Ronald Reagan approved his selection by Jimmy Carter last October, the White House has let Clausen understand in no uncertain terms that the Administration will be watching to see if the World Bank can become a more effective conduit for U.S. foreign aid. Dismayed with the liberal image that the bank acquired during the 13-year presidency of Robert S. McNamara, the White House has reluctantly agreed to provide money promised by the last Administration but at a slower pace.

Congress, too, seems wary of the bank's funding, especially when social programs are being trimmed. The House is threatening to make heavy cuts in U.S. contributions to the World Bank's affiliate, the International Development Association, which makes loans to the poorest countries at no interest.

Clausen, a Republican, is taking charge at a time when many of the 139 nations that belong to the bank are uneasy about the U.S.'s longstanding control over the institution. Ever since 1944, when the World Bank and the International Monetary Fund were jointly founded, the bank has been headed by an American and the IMF by a European. The U.S. still provides 21% of the World Bank's lending funds, but the country's foreign aid programs have not kept up with inflation in recent years. In 1970 U.S. foreign aid was, by almost any measure, one of the most generous programs in the world. But, on a per capita basis, the U.S. now ranks only an embarrassing 15th among industrialized nations in foreign aid, just ahead of Italy. Thus, to Third World nations, loans from the World Bank are now more important than ever.

The Bank's original task was to help finance the rebuilding of Europe after World War II. But over the years its focus has shifted increasingly toward Third World economic development. Last year it lent more than $12 billion to nearly 100 countries for projects such as mining, agricultural development, road building and rural electrification.

Clausen insists that the U.S. should continue to support the World Bank, if only out of self-interest. Says he: "The stronger those Third World countries become, the more they can absorb our products, and that means jobs at home." About 12% of the U.S. gross national product already depends upon foreign trade, and the figure seems certain to grow still higher by the end of the 1980s.

Even so, Clausen may still have to back off from at least some of the super-generous loan proposals made by his predecessor. Before he stepped down last month, McNamara, 65, set in motion an ambitious program to expand World Bank lending, already at $12 billion annually, to a full $30 billion by 1985, Raising that much money may simply be beyond the World Bank's powers without huge infusions of new capital from the U.S.

As Clausen knows, the key to winning renewed U.S. backing for the World Bank will be convincing the Reagan Administration that the bank will eventually expand U.S. business opportunities as well as enhance free enterprise abroad. To get that message across, Clausen plans to devote considerable time to selling the American public on the bank. Says he: "I'm going to spread the gospel about an important institution."

He may have trouble getting his message across in the White House. Clausen insists that the President has already assured him of support, but several high Administration officials have questioned the bank's funding. One sign of the fight awaiting Clausen in his new task is a study that has been commissioned by Treasury Under Secretary Beryl Sprinkel, a leading Administration advocate of sharply reduced federal spending. Its purpose: to see whether loans by the World Bank have tended to favor socialist countries. Says Clausen of the study: "I don't think we should have to answer any 'Have you stopped beating your wife?' questions."

This file is automatically generated by a robot program, so viewer discretion is required.