Possible IMF heir airs mostly upbeat view
Dutch journalists say their nation's finance minister, H. Onno Ruding, is assured of succeeding Jacques de Larosi`ere as managing director of the International Monetary Fund (IMF) next year. British Chancellor of the Exchequer Nigel Lawson says, ``Nothing is in the bag.'' He has called a meeting of European Community finance ministers for next Monday in Luxembourg to consider their choice for the prestigious and influential IMF job. By tradition, the European members of the 151-nation organization choose its director.
Mr. Ruding himself won't comment on ``what I do in the future.''
But during a visit here for the opening of an office of ABN/La Salle North America Inc., an affiliate of a Dutch bank, Ruding did assess the accomplishments of the last week's joint annual meeting of the IMF and World Bank in Washington. As chairman of the IMF's policymaking Interim Committee, he has an especially good observation post.
The slim and articulate minister made these points:
Progress in replenishing the funds of the International Development Association, the low-cost loan affiliate of the World Bank which serves the poorest nations, was ``more encouraging than many had expected.'' The donor nations agreed on a minimum of $11.5 billion over three years, with the hope of additional contributions bringing the total over $12 billion.
Ruding said that ``in all likelihood'' the Netherlands will make a special contribution toward that goal.
The major extra sum, however, will come from Japan. Japan and the United States are still working on a deal involving greater voting power for Japan in the World Bank and a further opening up of Japan's financial system to other nations.
The financial officials made ``no progress'' in regard to another general capital increase for the World Bank. That capital is used by the bank as the backup for development loans to the third world.
Ruding noted that the bank has been making loan commitments ``more rapidly than expected.'' The disbursements of those loans, however -- the actual cash flow to the poorer countries -- has been ``lagging.''
Bank staff people have been told to provide a detailed analysis of this problem. With that as a basis, the directors of the bank may then decide on whether or not a capital increase is needed .
Growth of bank lending, he added, ``fits very well into the Baker initiative'' -- the aim of US Treasury Secretary James Baker III to step up the flow of money into the main debtor nations.
The majority of finance ministers agreed with a ``rather optimistic'' assessment of the world economic outlook by the IMF staff. The staff report predicts an acceleration of real growth in the industrial countries the last half of this year and in 1987 to an average 3 percent annual rate.
The differences over exchange rates and interest rates between the United States on the one hand and West Germany and Japan ``continues,'' Ruding noted.
As a result, ``people'' are concerned about imbalances in exchange rates or balances of payments leading to recession, a further drop in the dollar, or a rise in interest rates -- ``though not all these things can happen at the same time.''
Nonetheless, Ruding saw within the Interim Committee a ``high degree of common approach to solving matters.'' He mentioned the strategy for dealing with developing-country debts as one area of progress in the last 12 months.
Mexico, ``a crucial case,'' signed an agreement ``in principle'' with commercial banks last Tuesday. Some 10 other key debtor nations have worked out programs for ``corrective actions'' within their domestic economies, together with the IMF or World Bank, and received additional financial resources in return.
Ruding noted that the finance ministers ``expressed a remarkable intensity of comments about the commercial banks.'' Whereas the multilateral development banks, such as the World Bank, have stepped up their lending to debtor nations, the commercial banks ``are lagging behind.''
The Dutch finance minister noted, however, ``a change in mentality'' at the meeting after the Mexican deal, involving nearly $6 billion in new commercial bank money, was announced.
``Many commercial bankers have expressed dissatisfaction with some elements of the deal,'' he said. ``But on balance I am positive about the Mexican deal.''
The assembled finance ministers and central bankers did not agree on an additional allocation of ``special drawing rights'' -- a bookkeeping form of money issued by the IMF.
The Interim Committee made ``good progress'' on the question of what is called ``multilateral surveillance.'' The ministers had an ``in-depth discussion'' of a system of indicators which could lead to the international community's assessing economic developments in individual countries.
``You might say that is a lot of words,'' he said. ``Maybe. But at least it is progress.''
Ruding has been an advocate of ``true multilateral cooperation and decisionmaking'' in the international field.
In his own country, the finance minister has been regarded as extremely tough in his efforts to reduce government spending. But he holds that this role cannot be transposed to his attitude toward the need for ``adjustment'' in developing countries. He approves the ``case-by-case'' approach of the IMF to work out loan packages for debtor nations with international payments problems.
Ruding is an open candidate for the managing director's job at the IMF. The Wall Street Journal says his campaigning has hurt his prospects in the staid circle of financial leaders.
Another leading candidate is Michel Camdessus, the governor of the Bank of France. Mr. Camdessus is a Socialist. It is said that the new conservative government of France would like to have a conservative heading the central bank and then give that bank greater power. So there is talk that Mr. de Larosi`ere, a conservative, may be offered the job if Camdessus goes to Washington for the IMF position.