Confusing White House signals peril international lending agency
Boston — President Reagan says he wants to make good on America's promose to support international banks that help poor countries. But his signals have so confused Congress that it's anyone's guess whether the United States will put its money where its mouth is.
The House of Representatives makes a key decision June 25 or 26 on whether to authorize funds for the International Development Association (IDA), a major lending agency of the World Bank.
The bankrupt IDA has been out of action since March. If its is to remain a Western- influenced tool for overcoming poverty and shaping world development, it needs new funds from the wealthy countries whose yearly contributions have kept it going since its founding in 1960.
For more than a year now the US has been dragging its feet on the matter. IDA has been kept afloat until March on the sheer goodwill of the Europeans and Japanese. They have advanced a staggering $1.9 billion to the floundering organization, assuming that the Americans would eventually come through with their share.
But as the House IDA vote approaches, that prospect is very much in doubt.
While the Senate has passed a bill to authorize the President's request for a three-year $3.2 billion IDA package, the current House package if framed in a totally different form from the Senate's. The administration's budgetary rules make no provision for reconciling this type of House-Senate difference. Down the road a showdown is certain.
Everything now depends on what the administration reallym wants.
Will it bend the rules sufficiently to push IDA through, or let it die in the name of the sanctity of budgetary rules? Or will it put some muscle behind getting the House and Senate to tack IDA legislation onto other bills that are more easily harmonized with each other?
As one House staffer puts it: "If the White House wants this legislation, they've got it. But nobody knows if they reallym want it."
The backers of IDA argue that failure would be catastrophic for the industrialized West, especially the United States.
It was the US that originally pressed Japan and Europe to get involved. A multilateral approach to aiding poor countries, it argued, was in the best interest of the free wolrd. And because IDA monies come from multiple sources, the IDA approach has got more aid to developing countries in which the US has interests, at less cost to the United States.
Some of these countries, like Mexico, would refuse direct American bilateral aid, fearing too much American control. But the IDA has made it possible to skirt that problem.
If US funding should now fail, IDA could remain in a state of chaos for years to come.Its current charter, though negotiated over many months and approved by two US administrations, would have to be renegotiated. And, say IDA's advocates , IDA's absence might force Japan and Europe to regionalize their aid programs, developing favorable trade relations with developing countries that compete with American interests.
The irony about all the agonizing over IDA funding is that there seems to be considerable bipartisan support it.
The White House has said for months that it wants to come through with the US pledge, even though Mr. Reagan is reevaluating whether to support the multilateral banks in the longer term.
The President sent a letter Tuesday to a House appropriations subcommittee urging support of his full package for IDA, including $850 million for next year. The subcommittee then voted its support, if the $850 million is eventually authorized by the House.
And if the current bills fail to be reconciled, a US Treasury Department spokesman suspects that support could be found among House Republicans for passing a new, more Senate-like IDA bill.
However, congressmen are still racked with uncertainty about the administration's "real intentions."
Despite expressions of support, so far it has been unable or unwilling to encourage a House approach to IDa legislation that would harmonize more closely with the Senate's.
Also, the administration has states its preference for aiding poor countries with direct bilateral aid rather than through multilateral banks.