11 Latin Nations Approve Proposal for Debt Talks

Latin America’s debtor nations Friday approved a detailed proposal for negotiations with industrial countries on debt, trade and development financing at meetings scheduled to take place in April in Washington.

The foreign and finance ministers of 11 Latin American countries, with a total foreign debt of $350 billion, said in a statement at the end of two days of talks that the debt crisis for the borrowing countries is far from over.

The conference, the third since the debtors held their first regional meeting last May at Cartagena, Colombia, agreed to use the April meetings of the International Monetary Fund’s Interim Committee and the World Bank’s Development Assistance Committee as the initial approach to the industrial countries represented in both bodies.

A proposal to invite such leading industrial countries as the United States, West Germany, Japan, France, Britain, Italy and Canada to establish a “political dialogue” with the debtors was deferred until after the Washington meetings.

“Something new will have to develop out of this,” Jesus Silva Herzog, Mexico’s finance minister, said in a talk with journalists. “The debt problem is not solved and it is not business as usual again.”

Dante Caputo, the foreign minister of Argentina, said: “What we are seeking from the industrial countries is the acceptance of the need to place the debt discussions in the framework of a political dialogue. The issues involved can’t be limited to negotiations with bankers.”

The refusal of the Reagan Administration to give the Latin American debt “political status” has been a principal obstacle to a broadening of the debt negotiations to include governments.

Ministers of the major debtor countries represented here--Brazil, Mexico, Venezuela and Argentina--that have made progress toward refinancing their debts on longer terms and with lower bank fees all agreed that the international fears over Latin American default or political upheaval had eased in the last six months.

The basic criticism of the Latin American debtors is that they are required to make payments on their debt at interest rates and bank fees that are much higher than when the loans were contracted, before 1982.

In addition, the banks no longer provide new capital to Latin America, so there is a net outflow of capital from the region as the debt interest is paid.