[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3114 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3114

 To authorize United States participation in a quota increase and the 
New Arrangements to Borrow of the International Monetary Fund, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 27, 1998

   Mr. Leach (for himself, Mr. LaFalce, Mrs. Roukema, Mr. Vento, Mr. 
 Hinchey, and Mr. Jackson of Illinois) introduced the following bill; 
 which was referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
 To authorize United States participation in a quota increase and the 
New Arrangements to Borrow of the International Monetary Fund, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``International Monetary Fund Reform 
and Authorization Act of 1998''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the International Monetary Fund (IMF) was conceived at 
        Bretton Woods, New Hampshire, to promote a sound and open world 
        economy and a stable international financial system;
            (2) while the international financial system has evolved 
        significantly since the IMF was founded fifty years ago, its 
        core mission remains focused on providing advice on 
        macroeconomic and exchange rate policy and highly conditional 
        financial assistance, including appropriate economic and 
        governance reforms, to countries facing balance of payments or 
        liquidity problems;
            (3) the United States, as the leading power of the post-
        cold-war world, has a greater interest than any other country 
        in a strengthened IMF that multilateralizes the financial 
        support for ongoing economic reforms in countries important to 
        United States interests and that can respond to threats to the 
        international financial system so that the United States does 
        not end up serving as the world's lender of last resort;
            (4) the United States is the only country with veto power 
        over major IMF decisions;
            (5) to sustain its capabilities, the IMF needs to sustain 
        its strength relative to a rapidly expanding global economy 
        characterized by exponential growth of global capital markets;
            (6) the United States financial commitment to the IMF 
        leverages several times as much from other countries, and its 
        general resource financing is not scored as a budgetary outlay; 
        and
            (7) the ongoing currency and banking crisis in the Far East 
        has affected United States financial markets and may result in 
        a decline in United States economic growth by as much as one 
        and one-half percent, and the United States has a vested 
        economic and national security interest in utilizing the IMF 
        and other multilateral mechanisms to help stabilize certain 
        Asian economies.

                  TITLE I--INTERNATIONAL MONETARY FUND

SEC. 101. PARTICIPATION IN QUOTA INCREASE.

    The Bretton Woods Agreements Act (22 U.S.C. 286-286mm) is amended 
by adding at the end the following:

``SEC. 61. QUOTA INCREASE.

    ``(a) In General.--The United States Governor of the Fund may 
consent to an increase in the quota of the United States in the Fund 
equivalent to 10,622,500,000 Special Drawing Rights.
    ``(b) Subject to Appropriations.--The authority provided by 
subsection (a) shall be effective only to such extent or in such 
amounts as are provided in advance in appropriations Acts.''.

                  TITLE II--NEW ARRANGEMENTS TO BORROW

SEC. 201. NEW ARRANGEMENTS TO BORROW.

    Section 17 of the Bretton Woods Agreements Act (22 U.S.C. 286e-2 et 
seq.) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and February 24, 1983'' and 
                inserting ``February 24, 1983, and January 27, 1997''; 
                and
                    (B) by striking ``4,250,000,000'' and inserting 
                ``6,712,000,000'';
            (2) in subsection (b), by striking ``4,250,000,000'' and 
        inserting ``6,712,000,000''; and
            (3) in subsection (d)--
                    (A) by inserting ``or the Decision of January 27, 
                1997,'' after ``February 24, 1983,''; and
                    (B) by inserting ``or the New Arrangements to 
                Borrow, as applicable'' before the period at the end.

                      TITLE III--POLICY PROVISIONS

SEC. 301. ADVOCACY OF CERTAIN POLICIES.

    (a) In General.--Title XVI of the International Financial 
Institutions Act (22 U.S.C. 262p-262p-5) is amended--
            (1) by redesignating section 1622 as section 1624;
            (2) by redesignating section 1621 (as added by section 327 
        of the Antiterrorism and Effective Death Penalty Act of 1996; 
        22 U.S.C. 262p-4q) as section 1622, and by relocating such 
        section so that it appears after section 1621 (as added by 
        section 526(e) of Foreign Operations, Export Financing, and 
        Related Programs Supplemental Appropriations Act, 1994; 22 
        U.S.C. 262p-4p): and
            (3) by inserting after section 1622 (as so redesignated by 
        paragraph (2) of this subsection) the following:

``SEC. 1623. ADVOCACY OF CERTAIN POLICIES.

    ``The Secretary of the Treasury shall instruct the United States 
Executive Director of the International Monetary Fund to use the voice 
and vote of the Executive Director to do the following:
            ``(1) Make the International Monetary Fund a more effective 
        mechanism for promoting market-oriented reform, trade 
        liberalization, and economic growth through--
                    ``(A) liberalizing the pricing, trade, investments, 
                and exchange rate regimes of countries to open 
                countries to the competitive forces of the global 
                economy;
                    ``(B) privatizing industry to eliminate government 
                monopolies, close loss-making enterprises, and reduce 
                government control over the factors of production; and
                    ``(C) economic deregulation by eliminating red tape 
                and establishing a foundation to support private 
                contract rights.
            ``(2) Make the International Monetary Fund a more effective 
        mechanism, in concert with appropriate international 
        authorities and the International Bank for Reconstruction and 
        Development, to strengthen financial systems in developing 
        countries and encourage the adoption of sound banking 
        principles and practices.
            ``(3) Ensure that the International Monetary Fund does not 
        become a lender of last resort for private investors, including 
        commercial banks, and accordingly should advocate policies 
        which include--
                    ``(A) strengthening crisis prevention and early 
                warning signals through improved and more effective 
                surveillance of the national economic policies and 
                financial market developments of countries, and fuller 
                disclosure of such information to market participants;
                    ``(B) accelerating work on strengthening financial 
                systems in emerging market economies so as to reduce 
                the risk of financial crises;
                    ``(C) consideration of provisions in debt contracts 
                that would foster dialogue and consultation between a 
                sovereign debtor and its private creditors, and among 
                those creditors;
                    ``(D) consideration by the Executive Board of the 
                International Monetary Fund of extending the scope of 
                its policy on lending to members in arrears so as to 
                encourage and expedite such a dialogue and 
                consultation;
                    ``(E) intensified consideration of mechanisms to 
                facilitate orderly workout mechanisms for countries 
                experiencing debt or liquidity crises; and
                    ``(F) consideration of establishing ad hoc or 
                formal linkages between the provision of official 
                financing to countries experiencing a financial crisis 
                and the willingness of market participants to 
                meaningfully participate in any stabilization effort 
                led by the International Monetary Fund.
            ``(4) Make the International Monetary Fund a more effective 
        mechanism for promoting good governance principles within 
        recipient countries by fostering structural reforms that reduce 
        opportunities for corruption and bribery.
            ``(5) Ensure that International Monetary Fund programs and 
        assistance are structured so that governments which draw on the 
        International Monetary Fund channel public funds away from 
        unproductive purposes, including excessive military spending, 
        and toward investment in human and physical capital as well as 
        social programs to protect the neediest and promote social 
        equity.
            ``(6) Ensure that International Monetary Fund policies and 
        procedures endeavor to support internationally recognized 
        worker rights such as freedom to join an independent trade 
        union and bargain collectively, including by--
                    ``(A) considering labor market policy in the 
                context of achieving macroeconomic stability and 
providing the foundation for sustainable growth;
                    ``(B) further enhancing collaboration between the 
                International Monetary Fund and the International Labor 
                Organization; and
                    ``(C) encouraging recipient governments not to 
                discriminate against guest workers.
            ``(7) Ensure that International Monetary Fund programs and 
        assistance are structured so as not to exacerbate or 
        precipitate ethnic strife within a recipient country.
            ``(8) Ensure that the International Monetary Fund 
        recognizes that macroeconomic developments and policies can 
        affect and be affected by environmental conditions and 
        policies, including by working independently and with the 
        multilateral development banks to encourage countries to 
        correct market failures and to adopt appropriate environmental 
        policies in support of macroeconomic stability and sustainable 
        development.
            ``(9) Facilitate greater International Monetary Fund 
        transparency, including by enhancing accessibility of the 
        International Monetary Fund and its staff, fostering a more 
        open release policy toward working papers, past evaluations, 
        and other International Monetary Fund documents; seeking to 
        publish all letters of intent to the International Monetary 
        Fund, and establishing a more open release policy regarding 
        Article IV consultations.
            ``(10) Facilitate greater International Monetary Fund 
        accountability and enhance International Monetary Fund self-
        evaluation by establishing an operations evaluation department 
        modeled on the experience of the International Bank for 
        Reconstruction and Development, guided by such key principles 
        as usefulness, credibility, transparency, and independence.
            ``(11) Coordinate with the International Bank for 
        Reconstruction and Development and other international 
        financial institutions (as defined in section 1701(c)(2)) in 
        advancing credit to small businesses, including microenterprise 
        lending.''.
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