Aid OKd for Nations Hurt by Embargo

The International Monetary Fund gave its support Monday to an accelerated effort to supply billions of dollars to poor countries harmed by the Persian Gulf crisis as the Bush Administration worked behind the scenes to flesh out details of the assistance package.

The approval by the IMF’s policy-making interim committee was announced in a communique that stressed the international lending agency would respond on an “expedited basis to present difficulties.”

The IMF approval followed promises by World Bank President Barber B. Conable Jr. that his agency stood ready to increase its lending as a result of the Mideast turmoil.

The Bush Administration is counting on both the IMF and the World Bank to provide significant support to bolster the trade embargo against Iraqi President Saddam Hussein.

In addition, President Bush earlier this month dispatched Treasury Secretary Nicholas F. Brady and Secretary of State James A. Baker III on global fund-raising missions seeking pledges of support from individual countries.

So far, the Administration has received commitments of $20 billion divided equally between support for the U.S. military buildup in the Mideast and assistance for the so-called front-line states of Egypt, Turkey and Jordan.

The Administration is concerned that the trade embargo against Iraq will not succeed without significant aid flowing to countries harmed economically either by the loss of export markets or a jump in oil prices.

The IMF communique provided no specifics on how much money would be forthcoming but did list a variety of IMF programs that could be tapped for money including a compensatory fund used in the past to aid nations hit by earthquakes and hurricanes.

Canadian Finance Minister Michael Wilson, chairman of the IMF interim committee, denied that the lack of specifics reflected any dissension among the 22 finance ministers who spent Sunday and early Monday crafting the IMF policy.

“We recognized the urgency of the needs of the people who are affected,” Wilson told reporters. “The urgency is stated, the framework is provided and now it is up to the IMF management to respond.”

Echoing remarks made by Conable last week, IMF Managing Director Michel Camdessus said he believed the emergency aid could start flowing early in 1991.

The Persian Gulf crisis has become the central focus of the annual meetings of the IMF and World Bank, being attended by representatives of the 152 nations that are members of the two institutions. President Bush is scheduled to address the finance officials today.

The Administration held a series of meetings behind the scenes Monday in an effort to tie up loose ends of the financing packages.

Treasury Department aides were meeting with representatives from Japan, West Germany, Britain, France, Canada, Italy, Saudi Arabia, the United Arab Emirates, South Korea and the 12-nation European Community in an effort to reach agreement on financing details.

These working-group meetings were to be followed on Wednesday by discussions at a higher level led by Treasury Undersecretary David Mulford.

Horst Koehler, an official in the West Germany Finance Ministry, said the discussions were being held to settle on an exact dollar amount of required assistance. But U.S. officials said the talks were covering a broader range of issues including the mechanisms to be used to funnel the aid to needy countries.

Just three weeks ago, the Administration said it wanted to raise $10.5 billion to meet the needs of Egypt, Jordan and Turkey through the end of next year. However, U.S. officials, who spoke on condition of anonymity, said Monday that the range now being considered is $12 billion to $14 billion in economic assistance to the three front-line nations with changing economic circumstances such as higher oil prices blamed for the revised figure.

In addition to this assistance, the United States is also seeking billions of dollars in additional contributions to other countries hurt by the jump in oil prices.

Nations mentioned for this group include the emerging democracies of Eastern Europe, which are about to lose their access to cut-rate oil from the Soviet Union, as well as such Third World countries as the Philippines, India and Brazil.