Energy loans from the World Bank: a controversy that won't go away

When the US withdrew support for an energy-loan facility to be affiliated with the World Bank, it reversed US policy toward Third World development and signaled the Reagan Administration's preference for linking aid and foreign policy through bilateral aid. The debate continues, however, because of the economic problems of nonoil-producing developing countries and their need to develop new energy sources. The World Bank had left the financing of energy development to the private sector until the steep price increases of the 1970s prompted it to expand its loan programs to finance oil and gas exploration in 18 countries. The bank sees this as a stabilizing influence and a justification for expanding the effort with a separate financing facility. A background summary covers the negotiation process and policy issues now under debate. (DCK)