Marshall Plan for the Third World

"We have heard your voices. We embrace your hopes. We will join your efforts." With those words, written by U.S. Secretary of State Henry Kissinger but delivered to the United Nation's Seventh Special Session last week by U.S. Ambassador Daniel P. Moynihan, Washington gave its answer to the share-the-wealth demands of the world's poor. In so doing, it at least temporarily forestalled anticipated bitter clashes between developing countries of the Third World and the rich industrialized West at the session.

The theme of the 12,000-word, 105-minute statement read by Moynihan was that the U.S. is not only prepared to discuss the demands of the developing states but also has specific and detailed ideas for meeting them. The long list of U.S. proposals -if backed and funded by all the industrial and oil-rich nations -could equal the Marshall Plan in impact. As forecast (TIME, Sept. 8), the speech avoided flashy or hostile rhetoric. It warned that there are "no panaceas" and stressed a "program of practical steps." Among them:

>> Measures to provide developing countries with some degree of economic security by insulating their export earnings from "the swings and shocks" of such "natural and man-made disasters" as weather and changes in the business cycle. If export income dropped, the countries would be able to borrow compensatory funds from a proposed new $10 billion "development security facility" of the International Monetary Fund. This would enable these countries to proceed on schedule with their development plans. For the poorest countries, the loans might be turned into outright grants, financed by the sale of some of the IMF'S gold.

>> Measures like the creation of an international investment trust to spur more private investment in developing countries. The trust would, for instance, establish a $200 million reserve to guarantee investors against loss.

>> Measures to provide immediate food and financial aid to the globe's poorest nations, whose 1 billion inhabitants constitute half of the developing world.

>> Measures to open new markets to the exports of developing states through tariff preferences and concessions.

>> Measures to "promote the efficiency, growth and stability" of commodity markets by establishing a "consumer-producer forum" for every key commodity, starting with copper. Kissinger emphasized, however, that the U.S. opposed price fixing for it would "distort the market, restrict production and waste resources for everybody."

Kissinger had been scheduled to speak himself, but was detained by the negotiations in the Middle East. Instead of delaying the speech, he had Moynihan take his place on the U.N.'s marble podium. Thus, there was no time for Third World delegates to launch the automatic barrage of anti-American complaints. With unusual attentiveness, the packed General Assembly listened to Moynihan; the silence was broken only by the rustling of paper as delegates, in unison, turned pages of copies of the text placed by the U.S. mission at every desk.

The broad U.S. approach went far toward meeting many of the demands for better terms of trade and greater financial aid contained in the call for a New International Economic Order (adopted at the U.N. last year over the objections of the industrialized nations). Thus, the Third World was compelled to focus on specific U.S. proposals and mute recriminatory rhetoric. Although most Third World capitals had yet to study the lengthy proposals in detail, initial reaction of their U.N. delegates was receptive and even warily favorable. "A very positive statement," said the ambassador of one radical African state. "A tour de force," commented an Asian diplomat. The tone of the session mellowed enough for Yugoslav Foreign Minister Milos Minic to declare that "points of contact" were emerging between rich and poor. India's Foreign Minister Y.B. Chavan talked soothingly of confronting problems rather than confronting each other. A similar mood of cooperation was evident in Washington at the joint annual meeting of the IMF and the World Bank (see ECONOMY & BUSINESS).

Even the Soviets were impressed, conceding that the Kissinger speech had had some impact in one of its aims: dividing the Third World. Clearly, the U.S. wanted to distinguish the goals and needs of the truly poor nations from those of suddenly prosperous oil-producing states. There were at least half a dozen critical references to the OPEC cartel in the text. For example, Moynihan reminded the U.N. delegates that world economic stability requires sustained growth in the industrial countries, which, in turn, need "reliable supplies of energy, raw materials and other products at a fair price." The U.S. then charged that the quadrupling of oil prices has inflicted "the most devastating blow to economic development in this decade" and the poorest nations "have been most cruelly affected by the rise in the cost of oil."

Years of Neglect. Reaction from OPEC-nation delegates was quick and strong. On the second day of the session, Iran's Interior Minister Jamshid Amouzegar answered that "the substantive issue is not whether the oil price has gone up too rapidly; the real issue is whether or not the world is willing to realize that the era of cheap and abundant energy is over." He then added, sarcastically: "The developed world felt easy about shrugging off responsibility for years of neglect, inaction, inconsistent policies and economic mismanagement, which have placed so heavy a burden on the world economy."

The Special Session concludes this week with the adoption of a final resolution. It will still echo calls for a new world economic order, blaming the West for many of the ills of the developing states and calling for immediate and sizable transfers of wealth. But both the U.S. and the Common Market countries are hoping for modifications reflecting the Kissinger proposals. At week's end Kissinger arrived belatedly in Manhattan and huddled privately with a number of Third World ministers attending the U.N. session.

Whatever the text of this week's resolution, the U.S. now has an opportunity to sustain the momentum toward conciliation and consensus by pushing its proposals at forums with considerably more power than the U.N. General Assembly -the IMF'S monetary talks, the negotiations on trade and tariffs, and the producer-consumer conference on energy and raw materials that is expected to convene later this year in Paris.

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