ROBERT ROOSA frequently uses such words as ``constructive,'' ``cooperation,'' and ``corrective'' in talking about international monetary affairs. The senior partner in the New York investment banking house of Brown Brothers Harriman has been an influential outsider in this vital area of world affairs ever since he was undersecretary for monetary affairs during the early 1960s. During those Washington years, he was a leader in developing the basic cooperation between finance ministers and central bankers of the industrial nations that continues today to glue the global economic system together.
Thus, when looking at the proposal of United States Treasury Secretary Nicholas Brady for dealing with the $1.3 trillion in developing-country external debts, he notes more than the technical details. He sees a process for developing agreement.
To him, the spring meeting of the International Monetary Fund and the World Bank that concluded Tuesday was an opportunity for the Brady proposal ``to incubate.'' It is a ``creative idea'' that needed consideration and development.
The debt problem has been so difficult because its resolution involves financial losses. The Brady plan, in effect, says the commercial banks will need to write off some of their loans to ease the debt-servicing burden of the developing countries. As an encouragement, the International Monetary Fund (IMF) and the World Bank will offer some guarantees on a portion of the remaining debts or the interest.
Mr. Roosa hopes those guarantees won't have to be exercised ``too often and in any significant degree.'' The Brady plan assumes that debt relief plus more economic reforms in the debtor nations will stimulate their exports and growth sufficiently that they won't default on their remaining debts.
If, however, more of that debt eventually does go down the drain, the IMF and the World Bank will take some losses - not the treasuries and taxpayers of the creditor nations.
Some numbers are emerging. The commercial banks may have to forgive as much as $88 billion worth of debt on their $440 billion of loans to Latin American nations. For US banks, that would amount to more than $20 billion, according to an analyst with Drexel Burnham Lambert Group.
US money-center banks would suffer. But with the exception of Manufacturers Hanover Corporation, the losses would be less than one year's earnings. Having built up reserves against such losses since the crisis began in 1982, all these banks could manage such a ``hit'' against earnings.
Details of the Brady proposal will likely develop during negotiations for the restructuring of debt of individual nations. The Philippines, Mexico, and Venezuela are considered prime candidates for such talks.
The commercial banks will bargain hard to keep their losses and risks to a minimum. Since 1982, the exposure of the commercial banks to the world's 15 largest developing-country debtors has grown 17 percent in nominal terms. It has declined after inflation. The exposure of creditor governments and international institutions, like the IMF and World Bank, has risen 107 percent. In other words, governments have taken on more of the debtor burden. The Brady plan will continue that trend. The IMF and World Bank would apparently commit as much as $25 billion of their resources over three years. Japan has offered $4.5 billion.
Actually, the Brady plan has its roots in proposals of both President Fran,cois Mitterrand of France and a former Japanese finance minister. Roosa expects the Japanese to play a key role in whatever is done to deal with the debt problem. He knows many of the officials and experts involved through the Group of 30, a private body he helped found in 1978 to explore international economic and financial issues.
``Getting discussions started and showing that the machinery can work is an awfully important part of the process,'' Roosa says.
That process will involve many actors besides the central bankers and finance ministers. The bank regulatory bodies in the US must decide on how to allow debt write-offs. The IMF and World Bank, having agreed in theory on how to divide their debt relief roles, must put that theory into practice.
But at least, as a World Bank official noted, ``There is now a political will to get moving on this.''