Clinton works for release of $18 billion owed to IMF

 

US President Bill Clinton appears to be winning his battle with Congress over releasing the $18 billion (£11.6 billion) the US owes the International Monetary Fund.

In spite of repeated appeals by Mr Clinton, Republicans controlling the House of Representatives have so far refused to approve the bulk of the $17.9 billion in increased US contributions until the IMF brings in new reforms. The increase for the US and other members was approved at last year's annual IMF meeting. But the refusal to pay by the US as the largest shareholder is holding up contributions from other members.

This week, as Congress tries to pass the Budget before rising tomorrow, there are signs that intensive behind the scenes negotiations to approve the IMF and other expenditure are making significant progress.

The negotiations are going on while Washington is the venue for the annual meeting of the IMF and the World Bank and is crowded with the senior finance ministers and officials from the 182 member countries. President Clinton took the opportunity of a major address to the meeting to urge Congress to give the IMF the contributions it needs to help resolve the economic crises threatening countries in southern Asia and Latin America.

"I have told Congress we can debate how to reform the operations of the fire department, but there is no excuse for refusing to supply the fire department with water while the fire is burning," Mr Clinton told the gathering of IMF/World Bank leaders.

The US Senate has already approved the $18 billion package but the more conservative Republicans in the House have so far approved only the $3.4 billion US contribution to the IMF emergency fund called the the New Arrangements to Borrow.

House Republicans led by majority leader, Mr Dick Armey of Texas, have refused to approve the remaining $15.4 billion to boost the IMF's core capital unless the organisation carries out a series of reforms. These conditions put the administration in an impossible position as the US cannot dictate IMF reforms to the other 181 members although it remains by far the most influential country in the organisation.

Now House Speaker, Mr Newt Gingrich and Mr Armey are working on a compromise which would release the full contribution on condition that the IMF would work to adopt new rules which Congress would monitor on an annual basis.

The conditions would be built into the legislation approving the increased funding. They would include making the secretive IMF release more information about its policies and operations; IMF borrowers would be required to honour existing trade agreements and the IMF would cease to subsidise the loans it gives to countries in trouble.

The IMF contribution will be part of an omnibus spending Bill which Congress is working to send to President Clinton for signing by the end of the week. But the package could still fall apart if conservatives in Congress insist on including anti-abortion conditions in foreign spending which the President has threatened to veto.