Developing Nations Thirst for Liquidity
Friedland, Jonathan, American Banker
In their seemingly never-ending bid to alter the international monetary system to their advantage, senior monetary officials from 24 developing countries convene in Washington, D.C., today for two days of meetings of demand reforms.
This "Group of 24" is expected to issue a report calling for a major increase in international liquidity, stronger scrutiny by international financing institutions of industrial countries' economic policies, and sustained backing for adjustment efforts in developing nations. The report is in response to a similar report compiled by industrial nations, known as the "Group of 10," in June.
A 52-page draft of the developing nations' report obtained by the American Banker, calls for creation of an interest-rate subsidy account under the aegis of the International Monetary Fund. It recommends that high-cost interest payments owed by Third World countries that pursue regorous adjustment efforts be "rolled over or refinanced."
If the Group of 24's deputies approve the report during the meeting, it then will be presented to the IMF interin committee at the annual October meeting in Seoul, South Korea, by the group's chairman, Argentine economic minister Juan Vital Sourrouille. The interim committee, which is the IMF's senior policy-making body, also will discuss the industrial nations' June report.
The Third World group's demands have been rejected in the past by the industrial countries. But Felix Alberto Camarasa, an Argentine director in the World Bank, told reporters that the latest effort "is not an academic exercise."
Arjun K. Singupta, India's executive director in the IMF, added that, in the past, the Group of 24 had not formally brought its views to the IMF's interim committee. But this time, the industrial nations "won't be able to say that we don't know what we want," he said. …