Share this story
Close X
Switch to Desktop Site

Unfriendly Persuasion

The United States is the world's only superpower, and, thank goodness, a benign one.

It has no ambitions for conquest. It's keen on spreading democracy. It is an evangelist for capitalism, sometimes too much so for those nations that regard the American version of free enterprise as overly hard-hearted.

About these ads

And every so often the US behaves with an arrogance that annoys even its economic partners. An old complaint is that America is "sanctions-happy," with its proscriptions on contacts with Cuba, Libya, and Iran that often hit its allies and other nations.

A recent example is the obligations Congress imposed on the International Monetary Fund in order for it to get $17.9 billion in extra funding.

The requirements aren't necessarily all bad. Many are merely advisory suggestions, not impositions. Some pleased the left in Congress, such as those calling for social safety nets in nations borrowing IMF money. Others the right, such as encouraging proper bankruptcy laws.

Nonetheless, the language in the 34 pages dealing with the IMF often sounds as if Congress is giving instructions to a US federal agency rather than contributing to a multilateral body with 181 other sovereign nation members. The US has less than a fifth of the total voting power within the IMF.

The appropriation for the IMF, moreover, will not affect the federal budget. The US gets an interest-bearing asset from the IMF in return.

Earlier this month, after President Clinton consulted with British Prime Minister Tony Blair and leaders of other major industrial nations, the Group of Seven went along with the congressional requirements. The US contribution will result in a $90 billion pool of fresh money to deal with today's financial crisis.

It would undoubtedly have been appreciated, though, if the US had won the IMF reforms with persuasion rather than arm-twisting.

About these ads

The IMF was already moving toward one congressionally required reform - more openness. The institution's executive board has just decided to publish data regularly on its resources and liquidity position.

Another congressional requirement, dealing with interest rates on IMF loans, applies to few loans.

At least the IMF survived the process. Some critics took the extreme position that it should be abolished. With the congressional election apparently indicating the public disapproves of extreme views, the IMF is safe for now. We applaud that.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.