331. Report Prepared by the Under Secretary of State for Economic Affairs (Wallis)1
Hans Tietmeyer, the West German Sherpa and Chairman for this year’s summit preparations, began our 10-hour discussions2 by stressing that he understood that the most recent text of the thematic paper3 was still too long. He said that he had tried to incorporate into the most recent draft the comments that were made by delegations at the last preparatory session in Berlin.
Sir Robert Armstrong (the British Sherpa) intervened to say that he thought that the current German paper was very good, but that now was the time to concentrate heavily on the conclusory sections, and to attempt to delete or shorten the background sections. Allen Wallis seconded this approach and asked that we concentrate on the conclusions.
[Omitted here is discussion of the world economic background, employment in industrialized countries, current accounts, and exchange rates.]
Developing Countries
There were a few comments by delegations (primarily the Canadians and Japanese) on the need to improve the tone of this section. They emphasized that not all poor countries are performing poorly and that the Asian NICs should be singled out as examples of what can happen when countries institute efficient economic policies.
The major part of the discussion on developing countries centered on the role and resources of the World Bank. Ostry of Canada emphasized that the current German text did not capture nor raise the medium-term nature of development—adjustment and growth. She said in the longer-term the role of the World Bank should envision a shift from project lending to adjustment. In her view, what is important now is not new resources for the Bank, but reassessing its goals and objectives. The Italians and French supported the Canadian view, but stressed that increased resources were needed immediately for the Bank. Obe of Japan said that we need to study the question of a capital [Page 811] increase, but what needs to be done immediately is to increase the efficiency of the Bank itself—programs and personnel. Sprinkel reiterated that the United States could not agree to join in any consensus endorsing a capital increase for the Bank. He cited our own budgetary constraints, as well as the great difficulties already encountered in trying to move the Bank into a greater adjustment role. Sprinkel did say that the United States was prepared to accept some increase in World Bank program lending over the current 10 percent level.
Tietmeyer summed up by noting that there was consensus that the World Bank must play a major role in the next stage of the debt situation. However, there was continuing disagreement over what that role should be and whether the Bank’s resources should be increased. Tietmeyer said that, for the time being, this whole question would remain bracketed.
The discussion on Africa established a consensus on the language of the German draft. The United States (McMinn) suggested some editorial changes to make the tone more positive, as well as to clarify concepts such as “a strategy for long-term food security.” All of our suggestions were accepted.
We raised again in more detail the U.S. position on the need for greater developed country cooperation and coordination in such areas as food aid assessments and agricultural research networks. There was general agreement on the need for Summit country technical representatives to discuss further what might be done in this area.
Attali said that President Mitterrand would propose some actions on emergency food aid at the Summit (e.g., an early warning satellite system, a transport task force, a coordinated IFAD program to fight “desert creep”). Tietmeyer asked that the French provide him with a paper explaining in further detail what they may propose at Bonn in May.
[Omitted here is discussion of trade, energy, and other issues.]
- Source: Department of State, Bureau of Economic Affairs, Office of Economical and Agricultural Affairs Files, Official Economic Summit Files, 1975–1991, Lot 93D490: Bonn Summit 1985. Confidential. Sent under an April 1 covering memorandum from Wallis to Shultz.↩
- The March preparatory meeting of the Sherpas for the Bonn Economic Summit took place March 23–25. The Summit was held May 2–4, 1985.↩
- Not attached.↩