WASHINGTON - The Clinton administration defended its latest funding request for the World Bank at a House Banking subcommittee hearing this week, saying the aid can help boost overseas sales of U.S. goods and improve the economy.

Lawrence Summers, Treasury under secretary for international finance, said the $1.25 billion sought by the administration "is not about charity or foreign aid" but is really an investment in building markets for U.S. exports.

Mr. Summers testified in a bid to counter budget-cutting proposals that would cut off U.S. aid to the World Bank and similar institutions designed to help the Third World.

Rep. John Kasich, R-Ohio, chairman of the House Budget Committee, has proposed eliminating all U.S. contributions to multilateral development banks as a necessary step toward balancing the federal budget.

Aside from the $1.25 billion for the International Development Association, the arm of the World Bank that provides no-interest loans to the poorest countries, the administration is seeking $75 million for the Enhanced Structural Adjustment Facility of the International Monetary Fund and $66.6 million for the Asian Development Bank.

U.S. funds account for about 20% of the capital of the IDA and the others. If the United States reduced its aid, other contributing nations would reduce theirs proportionately.

Mr. Summers said countries that borrow from the various agencies constitute the fastest-growing market for U.S. exports.

He said current IDA borrowers - the 70 poorest countries in the world - bought $20 billion of U.S. exports in 1993.

Douglas Oberhelman, chief financial officer of Caterpillar Inc., testified that bank-funded projects generated 2,200 jobs at the heavy equipment maker and its suppliers last year.

He said Caterpillar will sell $2.7 billion worth of products as a direct result of some 550 World Bank and Inter-American Development Bank projects.

"The banks can play an important role determining which products are favored in these emerging markets," Mr. Oberhelman said.

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