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Have-not heroine in peril; will OPEC free her?

The world is watching a "heroine in distress" economic drama unfold. The heroine is the nonoil-exporting countries. They have a bill due for oil. The "villain" (since any drama must have one) is the OPEC countries. And the hero is the International Monetary Fund (IMF) -- that 141-nation institution which is appropriately staid and, it is hoped, flush with money.

The danger is that our hero (the IMF) will not be able to come up with money fast enough to rescue our heroine (the poor countries) from a sad fate -- a forced necessity to tighten her purse so much that she will slip deeper into poverty or even go bankrupt.

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However, according to Dr. Manfred Lahnstein, state secretary at the West German Finance Ministry, it "became clearer" at last week's annual meeting of the IMF in Washington that this organization will be "more active" in financing those payments deficits. In other words, he believes our hero will gallop to the rescue.

Next year, according to Jacques de LArosiere, managing director of the IMF the nonoil-exporting poor countries face some $80 billion of red ink in their international payments "current account." That is twice as large as their combined deficit in 1978. Our heroine is in poor financial shape.

This deficit is to a considerable extent the counterpart of the increase in the surplus of the oil-exporting countries from $5 billion in 1978 to around $ 110 billion this year. Of course, our villain (OPEC) in this case figures he is only charging an appropriate price for a nonrenewable resource and that he must pile up sufficient funds to provide for his sons and daughters when the oil runs out.

The IMF (our hero) had earlier created a special fund called the Witteven facility, with $10 billion for our heroine, after the last round of petroleum price increases in 1973-74. But that money will run out in the next few months.

So Dr. Lahnstein and the other representatives of the major industrialized countries met with delegates from the developing countries last week to figure out how the IMF can be sent to the rescue.

They have a plan. It consists of creating what Dr. Lahnstein calls a Witteveen II facility. (Johannes Witteveen is the former managing director of the IMF.) But where is the money to come from?

Dr. Lahnstein and many others would prefer that out hero (the IMF) borrow it directly from the OPEC countries (four villain). Some $10 billion or $20 billion would do wonders to help our heroine fatten her empty purse. The nonoil developing countries could also borrow money from commercial banks, but these banks have been looking down their noses somewhat at the creditworthiness of our troubled heroine.

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But there is a catch. Our villain has been annoyed at the United States, West Germany, and others for blocking the Palestine Liberation Organization from observer status at that gathering of the world's top financial ministers and central bank governors last week in Washington. No PLO, no money, honey, they in effect said.

Well, our hero (The IMF) and his sister (the World Bank) have turned this issue over to a committee to try to resolve the PLO issue. That will take time -- at least well past the US election.

Meanwhile, our hero and Dr. Lahnstein and others hope that the tears of our heroine will soften the heart of our villain and the loan to our hero will be approved and he will be rich enough to come to the rescue.

Dr. Lahnstein suggests that if the OPEC countries do provide money, they should be given the power to determine the conditions of the loans -- the interest rate, length of maturity, and so on. But the IMF will decide which nation to lend it to.

Maybe, he says in effect, our villain could get so involved he too would become a hero. (Of course, Dr. Lahnstein would never use the word "villain" in talking of the OPEC countries.)

"There is a widespread fear about the Arabs taking decisions internationally, " he said in an interview here. "but of course, that is what we want them to do."

The IMF has other ideas to raise funds if the OPEC countries don't change their minds. It could borrow directly from the international capital markets. Since the OPEC countries must find some place to put their money, they often invest it in the Eurocurrency markets. But it is short- term money there, and the IMF would prefer to borrow long term, directly from the surplus treasuries of the OPEC countries.

Also, our hero (the IMF) is hoping that the United States Congress will approve later this year a 50 percent increase in quotas for the fund. That would mean an additional $26 billion to the IMF.

That's a lot of money. But those deficits could continue for years, though, one would hope, not such large ones.

So our hero (the IMF) must be loaded for a long time to come. For now, the question remains: Will our hero reach our heroine in time and with enough "big bucks"?

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