IMF and World Bank plan to hold steady on global debt policy
Two key players in the global debt drama, the International Monetary Fund and the World Bank, plan no major new moves despite calls for help by very poor countries, officials and monetary sources say. The issue of African debt, a cornerstone of concern about the desperately poor, will be one of the topics discussed in detail at the week-long meetings of the International Monetary Fund (IMF) and World Bank which begin today.
The IMF position is essentially that nations must take the hard steps to move toward living within their means, if they ever expect to have sustained growth.
According to World Bank president Barber Conable, the bank has no specific new proposal in mind at present, but it does plan to seek new ways to bring more assistance to the poorest countries of Africa and continue earmarking more loans for debt reform.
Mr. Conable holds that the debt initiative by US Treasury Secretary James Baker III, which calls for $29 billion in new funding from commercial and multilateral development banks, is working.
The IMF, which was initially concerned about the Baker debt plan because it seemed to reduce the agency's role, has also espoused Baker's major tenet that reform in the poorest countries must be accompanied by growth.
The banks are saying that the IMF should provide more money for the poorest countries instead of being a drain on those countries trying to repay IMF loans.
It has been estimated that last year, the IMF took back $400 million more from Africa than it put in.
While there is a possibility that the industrial countries may move toward an accord on new assistance and policymakers seem to feel that some new initiatives are needed, general agreement on a concerted plan promises to be difficult.