IMF

Failure Deserves $18 Billion Reward, Says Administration
International Monetary Fund

Governors Asked to Back Additional IMF Funding

by Dan Balz and Terry M. Neal

Deputy Treasury Secretary Lawrence H. Summers told the nation's governors that Asia has many hurdles to overcome before its economic health is restored and asked the nation's governors to press Congress to approve additional U.S. funding for the International Monetary Fund.

Summers, the Clinton administration's top expert on the Asian problem, said the spillover effects have infected other economies, including Russia's and South Africa's, and threaten that of the United States.

"Make no mistake," he said. "Containing these problems is critically important to America's future. It is about safeguarding American jobs, American savings and American national security."

Summers praised the governors' past support for new IMF funding. But he said the IMF is so strapped for funds it cannot move rapidly to deal with future crises, which "makes future problems more likely."

The administration seeks $18 billion more, but the issue has been stalled in Congress, where Democrats, Republicans and independents are pushing for significant IMF reforms.

Former secretary of state Henry A. Kissinger pointedly criticized IMF officials for failing to take into account the political impact of their economic prescriptions in the affected countries. Speaking to an audience of elected officials, Kissinger said the IMF is poorly equipped to recommend economic policies to struggling countries that are grounded in political reality. "It does not help political leaders to be presented with solutions that undermine their political situation," he said.

Kissinger, while praising Summers and Treasury Secretary Robert E. Rubin for their efforts to stabilize Asian and other economies, said the United States has been "solving the symptoms but not dealing in my view with the fundamentals" that afflict many nations. "The IMF was never designed to restructure the whole world," he said.

Agriculture Secretary Dan Glickman also raised the issue of IMF funding, noting that if Asian economies collapse, U.S. farm exports will be severely affected. "Why?" he asked. "Because they buy our food."

Publisher's note -- aha! We're supposed to give taxpayer dollars to international banks so that they can lend money to foreigners to buy our food. If Glickman really believed that, why not cut out the middleman and just pay our farmers directly?

This article originally appeared in the Washington Post.


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