Bi-partisan Bloc of Senators Support World Bank and Imf Rejection of PLO Demand for Observer Status

A bi partisan bloc of half the U.S. Senate membership is expressing support to the directors of the World Bank and the International Monetary Fund (IMF) for rejecting the Palestine Liberation Organization’s demand to have observer status at the meetings of the two institutions.

Led by Sens. Howard Metzenbaum (D.Ohio) and Robert Dole (R.Kansas), members of the bloc have signed a letter to World Bank president Robert McNamara commending his “leadership on this issue.” A copy of the letter, dated Aug. 5, is to be delivered to McNamara later today after additional Senators are given an opportunity to sign it before the Senate goes into recess until Aug. 18. Names of Senators from 42 states were on the letter at noon today.

In a separate communication to other Senators, Metzenbaum and Dale denounced Saudi Arabia and Kuwait, saying they were using political conditions to influence support for the PLO. Copies of both the letter to McNamara and the Metzenbaum-Dole communication were obtained by the Jewish Telegraphic Agency.

“We believe that the board acted correctly in refusing to grant international legitimacy to an organization that represents no state, espouses terror as a political method and has as its stated goal the destruction of Israel, a member nation of both the World Bank and the IMF,” the Senators wrote McNamara. “In addition we want to share with you our concern about press reports that nations friendly to the PLO have brought financial pressure to bear upon the World Bank and the IMF in order to secure a reversal” of the decision of the bank’s board July 25.

The Senators also told McNamara that the U.S., the “mainstay” of the bank and the IMF, “has scrupulously observed the principle that multi-lateral financial institutions must be able to operate without political interference. We believe that any such conditions imposed from any quarter will inevitably erode the credibility and the effectiveness” of the two institutions. The U.S. is understood to have contended strongly to the directors to oppose PLO recognition.

In a separate communication to Senate members, Melzenbaum and Dole said that “in retaliation” for the bank’s rejection of the PLO demand, “Saudi Arabia and Kuwait have reportedly imposed a ‘freeze’ on their cooperation with the World Bank which has meant postponement of a $402 million Saudi loan and withdrawal of a Kuwaiti commitment to underwrite $86 million in West German bond purchases.”

The two Senators told their colleagues that to accord observer status to the PLO “would in effect recognize as legitimate the PLO’s methods, programs and ultimate objectives.

CONCERNED WITH THE LARGER IMPLICATIONS

“But aside from the questions of the PLO,” the Senators added, “we are concerned about the larger implications of this attempt by financially powerful nations to attach political conditions to the participation in World Bank and IMF programs. As our nation has long recognized, any such conditions imposed from any quarter will inevitably erode the credibility and the effectiveness of these important multi-lateral institutions.”

At the World Bank, JTA was informed that the institutions board of directors acted on a move by the PLO for observer status at the annual meeting of the bank and IMS in Belgrade last year. The eight-member joint committee on credentials became deadlocked in a 4-4 vote on the issue in November in Paris.

Last month, the directors of the institution decided to recommend to the governors, who are finance ministers or heads of central banks, that they considered defining more precisely what an observer is for the institution’s meetings, and that meanwhile the observer list that prevailed at the Belgrade meeting continue at the institution’s next annual meeting in Washington Sept. 30-Oct. 3. That list excludes the PLO.

The governors of the two institutions, each of which has about 135 nations as members, include the U.S., United Kingdom, France, Germany and Japan, and 15 others selected by the remainder of the members.

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