Magazine article American Banker

Easing Trade Barriers Rejected as Third World Loan Condition

Magazine article American Banker

Easing Trade Barriers Rejected as Third World Loan Condition

Article excerpt

Easing Trade Barriers Rejected As Third World Loan Condition

WASHINGTON -- The Reagan administration in Thursday rejected legislative proposals to make trade liberalization a condition for further lending to the developing nations.

In additon, a top Treasury Department official told a congressional panel that the Reagan administration is "prepared to consider" increased funding to the World Bank.

David C. Mulford, the Treasury's assistant secretary for international affairs, appeared before the House Banking subcommittee on international development institutions and finance to discuss the so-called Baker initiative to boost lending to the Third World.

That initiative, which was announced by Treasury Secretary James A. Baker 3d last fall, calls for increased lending to developing nations by commercial banks, the World Bank, and the International Monetary Fund -- provided those nations implement economic reforms to promote growth.

"Commercial banks in virtually all of the major creditor nations have now indicated their willingness to support the U.S. debt initiative and to provide net new lending to debtor nations," Mr. Mulford told the committee.

Mr. Mulford added, "We are prepared, if all the participants in the debt strategy do their part and there is a demonstrated increase in the demand for quality lending, to consider a general capital increase for the World Bank."

Rep. Stan Lundine, D-N.Y., chairman of the subcommittee, plans to introduce legislation on the debt problem that he says is designed to "complement rather than contradict" the Baker initiative. …

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