Congress balks on upping US help for have-not lands
A few hours after President Reagan spoke to the world's finance ministers and central bankers of the need for Congress to meet the nation's commitment to the World Bank, Congress decided not to - at least for a time.Skip to next paragraph
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President Reagan, in his Tuesday morning speech to the annual meeting of the bank and its sister institution, the International Monetary Fund, referred to the US agreement with other industrial nations and a few oil-rich countries to provide low-cost loans to the globe's poorest nations.
Several years ago, the United States agreed to provide 27 percent of $12 billion over three years for the International Development Association (IDA), an affiliate of the World Bank that handles these bargain loans. But when it comes to money, an American president can sign an international agreement, but only Congress can provide the funds.
In this case, instead of paying its share in three years, Congress stretched it out to four years, and now it may even go to five years.
''It is important,'' President Reagan said, ''that these funds be available to help the people in the poorest countries raise their standards of living.''
Later that day, Sen. Daniel Inouye, a Democrat of Hawaii, pleaded before the Senate Appropriations Committee that it approve the $1.095 billion needed to fulfill the US obligation. His proposal was opposed by Republican Sen. Robert W. Kasten Jr. of Wisconsin. Thus, as a staff official noted, there was no chance of approval and the motion was withdrawn.
Although the situation is somewhat complicated, it means a decision on the amount is likely to be put off until Nov. 15, when a second continuing resolution is to be considered. There remains a question as to whether the amount Congress will approve will be $945 million, as considered in the House, or only $700 million, as proposed by a Senate subcommittee, or some compromise. World Bank and White House officials are pushing for the larger amount. They hope to pick up the final $150 million at a later time through a supplemental appropriation.
The incident underscores the complexity of American politics, a complexity often bewildering to the foreign officials gathered here.
For instance, the House is controlled by the Democratic opposition. Yet it has been more forthcoming with IDA funds than the Republican-controlled Senate. Nonetheless, Treasury Secretary Donald Regan complained at a press conference Wednesday, in explaining his difficulties with Congress, that the Republican Party does not control the House.
The size of the next ''replenishment'' of funds for the IDA has been a hot topic here. The US has been insisting that the most it could manage would be $ 750 million a year, considerably less than the previous replenishment, and just 25 percent of the total donations. When the contributions of other nations are added to this, the total package would be $9 billion over three years. Management of the World Bank has been pressing for $16 billion. Other industrial nations have been talking about $12 billion.
The US has been adamant in its position during negotiations. But at his press conference, Secretary Regan appeared to hint that he might be more flexible. ''We will be as supportive as we possibly can,'' he said. But he questioned whether Congress was predisposed to make a larger contribution, although noting that he had not yet ''talked to the people on the Hill'' about it.
Meanwhile, finance minister after finance minister has been directly or indirectly urging Congress to get on with its approval of both money for IDA and for the expansion of the International Monetary Fund's resources.
And Andrew de Lattre, special representative for IDA negotiations, told the press that a $9 billion IDA replenishment ''would severely impair the ability of the association to play an effective role and meet the very serious and very substantial real needs of the world's poorest peoples.''
Also, the president of the World Bank, A.W. Clausen, made an impassioned plea for help for the poor nations in his annual address Tuesday. At last year's annual meeting in Toronto, the first major address to the bank by this former chief executive of Bank of America left the cool impression of a tough banker.
This time, Mr. Clausen noted: ''For many who wish to see these low-income nations helped, it is argument enough that there are hundreds of millions of people existing there at unacceptably low standards of living. But there is also the argument that these low-income nations represent a vast potential market for goods and services, if the potential of these nations can be realized.''
He maintained that help to the developing countries is not an issue of charity. ''It is one of national self-interest in an interdependent world economy! I refuse to believe that it is so complex that rich and powerful nations cannot see where their self-interest lies, and cannot recognize the political, commercial, and security arguments for doing more.''
Mr. Clausen argued that the international community's capacity to help developing countries with their problems is underestimated, that there must be a major effort to accelerate the low-income countries' growth and reduce poverty.
''But the procrastination must end,'' he said. ''And it must end now! The economic distress of the poorest nations is a time bomb ticking away. We delay defusing it at our peril!''
So far, however, Congress has not been convinced.