Abstract
Reagan's budget policy has cut support for an international energy agency planned to channel $30 billion into oil-poor Third World countries. The funds would finance energy projects over a five-year period and would more than double World Bank development aid. The US representative to the World Bank called the action ill-advised for its effect on both the Bank and global economic development in his resignation statement. Conceived as a way to counteract the economic strain of high energy prices, the financial aid for energy development would also have served the self-interests of industrialized countries. The new institution would have raised money through world capital markets with the backing of loan guarantees from member governments and with recipients raising some funds of their own. The Bank hoped that some of the capital would come from Organization of Petroleum Exporting Countries (OPEC) members in order to recycle the capital surpluses of oil-producing countries. The US budget cut accompanies a review of US participation in multilateral agencies and a shift toward bilateral aid and private-industry involvement. (DCK)
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