PLO Denied Observer Status at Meetings of the World Bank

The two chief branches of the World Bank, the International Monetary Fund (IMF) and the Reconstruction and Finance Corporation (RFC), made known today that they have denied the Palestine Liberation Organization observer status of its nation meeting here and in the process upset a decision by the chairman of the sessions which begin next Tuesday, to exclude all other observers.

The IMF and the RFC said that the resolution offered by the United States against changing the rules that prevailed at the 1979 meeting has been adopted by their boards of governors. In accordance with the usual practice, the IMF and the RFC refused to give details of the balloting either by the IMF’s 140 members or the RFC’s 135.

The IMF, making the first announcement last night, said its resolution provides for the executive directors to “consider the relevant rules with a view to making such proposals to the board of governors as they believe necessary.” An IMF spokesman said he would not comment on whether this means the issue will arise again next year since Saudi Arabia and Kuwait, both strong backers of the PLO, have been agitating for its inclusion as on observer.

The RFC early this afternoon disclosed that the resolution adopted by its board of governors “provides that attendance at the 1980 meetings is limited to those observers invited to the 1979 meetings.” It is assumed that the IMF will support this stand.

The two resolutions effectively bar observer status to the PLO since it did not have this status at the 1979 meetings. However, Tanzania, which has the chairmanship of this year’s annual meetings, decided to deny observer status to all other organizations. Tanzania, represented by its Finance Minister, Amir Jamal, made its decision known after the IMF disclosure of the balloting that ended Friday.

CIRCUMVENTING TANZANIA’S DECISION

But the RFC ruling apparently has effectively overruled the Jamal decision. The Tanzanian decision reportedly was a sop to the Arab countries for being defeated on their PLO maneuver.

The organizations, which traditionally participate in these World Bank meetings of finance ministers and central bankers, include the Bank for International Settlements (BIS) and the Organization for Economic Cooperation and Development (OECD). An American source said prior to the RFC statement that the OECD and the BIS probably would be able to have representation through “unofficial observers or special guests” to circumvent Tanzania’s decision.

The RFC’s decision apparently took cognizance of the view that these important international finance organizations should not be excluded because of pique among the PLO’s allies.

Although the results of the balloting have been unofficially known since Friday, the IMF and the RFC reportedly have delayed announcing the results because Arab countries had challenged the results and Saudi Arabia and Kuwait suspended financing some projects in demanding status for the PLO.