Brady Calls for Crackdown on Late IMF Loans
Treasury Secretary Nicholas F. Brady said today the United States will support increasing the resources of the International Monetary Fund only if it agrees to crack down on poor countries behind in their loan payments.
Brady’s comments, to IMF’s policy-making Interim Committee, came one day after finance leaders of the world’s seven largest industrial powers endorsed a 50% boost in the fund’s resources to $180 billion from the current $120 billion.
Brady acknowledged that the 152-nation lending organization needs more money to meet new demand for its loans from Eastern European countries moving from communism to capitalism, as well as for developing nations. Although the United States had supported a smaller boost, he said it has agreed to 50% as a compromise.
“We firmly believe that the IMF must have adequate resources . . . to continue to fulfill its critical responsibilities in the world economy,” he said.
However, he said the United States will support an increase in capital contributions from member nations, called quotas, only if the fund adopts a new strategy to wring $4 billion in back payments from 11 countries--Sudan, Zambia, Peru, Honduras, Guyana, Cambodia, Vietnam, Liberia, Panama, Sierra Leone and Somalia.
“These arrears pose a fundamental challenge to the IMF’s financial integrity and its central role in the world economy,” Brady said.
The Group of Seven--finance ministers and central bank chiefs from the United States, Japan, West Germany, Great Britain, France, Canada and Italy--met Sunday in an ornate caucus room in the Capitol.