Business: Brandt Sounds the Tocsin

To trim the world's wealth gap

Reshaping worldwide North-South relations has become a crucial commitment to the future of mankind. We believe this to be the greatest challenge to mankind for the remainder of this century.

With that dramatic call to action, former West German Chancellor Willy Brandt this week presents his long-awaited report on the Gordian problem of relations between rich and poor nations. With a barrage of chilling statistics and often eloquent prose, the 1971 Nobel Peace prizewinner proposes a summit of some 25 world leaders to focus on "mutual interests in the field of peace, justice and jobs." While charging that the "air is thick with alibis for inaction," he says that nothing less than a summit will concentrate world attention on the "mortal dangers threatening our children and grandchildren."

Three years ago, World Bank President Robert S. McNamara asked Brandt to head a private study on the unsettled and potentially explosive relations between industrialized and developing countries. Joining Brandt were 17 other luminaries, including such former heads of government as Chile's Eduardo Frei, Britain's Edward Heath and Sweden's Olof Palme. Americans on the Brandt commission were Katharine Graham, chairman of the Washington Post Co., and Peter G. Peterson, chairman of the Wall Street investment bank of Lehman

Brothers Kuhn Loeb. The group held ten meetings over a two-year period and consulted experts ranging from Henry Kissinger to Economist Barbara Ward.

The North-South problem as presented by the 225-page report is both serious and growing worse. World stability and peace are threatened by the disparity between industrially rich but sometimes materials-poor nations concentrated in the Northern Hemisphere and the industrially poor but often materials-rich, the yearning, the demanding, the mostly non-white nations in what is roughly called the Southern Hemisphere.

Three-quarters of humankind is living on only one-fifth of the world's income. The commission report adds that 800 million people exist in desperate poverty. One American today uses as much commercial energy as nine Mexicans, 16 Chinese or 1,072 Nepalese. More than 90% of the total manufacturing capacity is located in wealthy developed countries, which increasingly block imports of industrial products from the poor nations. The explosion of oil prices has pushed the needy countries into a bleak house of poverty. The combined debt of the Third World has grown from $70 billion at the end of 1970 to $300 billion today.

In an "emergency program" for 1980-85, the Brandt report proposes four steps:

Increased Development Aid. An additional $30 billion beyond the $20 billion annually already provided by the developed countries is deemed necessary. The International Monetary Fund is also encouraged to expand its gold sales, with the proceeds being used to subsidize loans to poor countries. The commission urges the World Bank and other international organizations to guarantee commercial bank loans to developing nations.