Gore Reveals Debt-Relief Plan for Poor Nations

Vice President Al Gore said Friday the administration will propose new funding to relieve the debt smothering the world’s developing countries, and he called for the sale of some International Monetary Fund gold reserves to provide further debt relief.

The initiative, intended to allow fresh investment and new growth in poor countries from Southeast Asia to Africa to Latin America, will be in the budget that President Clinton presents to Congress on Monday, Gore said in a speech to the World Economic Forum here.

Gore also said the United States will call for broad and deep reductions in agricultural tariffs, which now average 40% on farm products around the world and hurt the ability of U.S. farmers to sell to many countries.

He directly criticized European policies such as subsidies on agriculture, “which cost the average European family $1,500 a year.”

Even as he spoke, U.S. trade negotiators in Geneva were threatening to impose sweeping tariffs on European products in a long-running dispute over bananas.

Gore also criticized European objections to imports of U.S. beef treated with growth hormones, and other biologically enhanced crops. “We are committed to ensuring that the world’s agricultural producers can use safe, scientifically proven biotechnology--without fear of trade discrimination,” Gore said.

The speech by the presumptive Democratic presidential nominee to a gathering of almost 2,000 national leaders, corporate chief executives and economists in this Alpine ski resort, was part of his increasing visibility on international issues in recent months. It was intended to suggest how he would lead the United States in its economic relations with other nations.

It marked Gore’s “coming out with a coherent set of policies. It was Gore announcing U.S. initiatives, setting his priorities,” said Robert D. Hormats, vice chairman of Goldman Sachs and a former assistant secretary of state in the Carter administration.

Gore gave no details of the proposal to remove debt burdens from developing countries. Hormats said it could be carried out by the IMF selling some of its gold reserves and using the proceeds to, in effect, “pay itself back the developing country loans.”

IMF Managing Director Michel Camdessus has said his agency would reluctantly consider selling its gold reserves to fund an existing IMF-World Bank initiative designed to provide money to poor countries to reduce their debts. But some IMF members, including Germany, Japan and Italy, have opposed that idea. The IMF has about $30 billion worth of gold.

Last week, German Chancellor Gerhard Schroeder launched his own proposal for alleviating the debt burdens of the world’s poorest nations, calling on the members of the Group of Eight nations to make this a priority at their June summit in Cologne.

Schroeder also urged the Paris Club of donor nations to consider total cancellation of commercial credits and loans for the most debt-ridden nations.

Gore said debt relief would enable poorer countries to invest anew to get their economies moving. “It means more resources for environmental protection and child survival,” he said.

His appeal dovetailed directly with the Davos conference’s theme of encouraging efforts to renew economic growth and reduce imbalances of rich and poor in the global economy.

The vice president’s remarks reflected deep American beliefs about economics and society. Gore called for renewed commitment to open markets in the face of difficulties in the world economy and criticism of “American” economic ideas that is heard openly at this international conference.

A question from the audience challenged Gore to comment on “Asian values and American values,” and his response was less combative than in a November speech in Malaysia that attacked the policies of President Mahathir Mohammed.

But his reply here did not mince words. The Asian financial crisis of the last two years has “discredited” policies prevalent in Asia of government-directed investment, he said.

Gore opened his speech with a knowledgeable discussion of technological advances in electronics, computing and biotechnology, relating them to advances in global trade and finance. The combination has made this era historic, he said, with “changes in our ways of thinking as profound as those which accompanied the Renaissance.”

He drew an impassioned connection between economics and human betterment. “Free markets, after all, are sustained by something deeper: the human freedoms and shared prosperity that support a consensus for engagement and reform.”

Times staff writer Evelyn Iritani contributed to this report.