[Congressional Record Volume 146, Number 32 (Tuesday, March 21, 2000)]
[Extensions of Remarks]
[Page E355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E355]]



              IMF REFORM REQUIRES THOUGHTFUL CONSIDERATION

                                 ______
                                 

                            HON. JIM SAXTON

                             of new jersey

                    in the house of representatives

                        Tuesday, March 21, 2000

  Mr. SAXTON. Mr. Speaker, recently a blue ribbon commission set forth 
its bipartisan recommendations on reform of the International Monetary 
Fund (IMF) and World Bank. The commission's chairman, noted economist 
Allan Meltzer, worked for months in the most accommodating and fair way 
with all of the commissioners to maintain a process of honest 
intellectual inquiry and collegiality. Votes were taken along the way 
that established overwhelming bipartisan consensus on all of the major 
issues. The resulting report addresses some of the most difficult and 
challenging issues in international economics, and proposes a number of 
serious and substantive reforms of the IMF, World Bank, and regional 
development banks. Reasonable people can and do disagree on these 
highly complex issues, but generally do so on the basis of facts, 
evidence, and analysis.
  Unfortunately, however, even before the report was released, a highly 
coordinated political effort was initiated to attack the commission's 
report with outlandish charges and inflammatory rhetoric. These attacks 
generally were uninformed by any familiarity with the substance or tone 
of the majority report, not to mention the difficult financial issues 
related to the IMF and World Bank. These attacks only serve to 
discredit those who made them, and the use of such issues as a 
political football reflects a lack of responsibility and concern about 
the future of these institutions. The following article published in 
the prestigious Financial Times recently shows how these deplorable 
attacks on the commission have been perceived, and do no credit to 
those who make them.

                  [From the Financial Times (London),
                             Mar. 10, 2000]

                            Politics of Aid

       It is occasionally difficult for outsiders to grasp just 
     how poisonously partisan U.S. policymaking has become. That 
     this should be the case in domestic matters is neither 
     surprising nor particularly worrisome. But the collapse of 
     bi-partisanship in crucial areas of foreign policy is another 
     matter. The response in Washington to the report from the 
     international financial institutions advisory commission is a 
     perfect--and disturbing--case in point.
       Take, for a moment, not the politics of the majority 
     report, but its substance. It does not propose the abolition 
     of the International Monetary Fund. Nor does it suggest the 
     end of foreign aid. On the contrary, it defines a role for 
     the IMF as lender-of-last resort and suggests deep debt 
     relief and a significant increase in U.S. budgetary support 
     for the poorest countries, ``if they pursue effective 
     programmes of economic development''.
       Though simplistic in important respects, the report does 
     represent an attempt to define a role for the international 
     institutions and a case for aid that makes sense today. Since 
     this comes from a group dominated by Republicans, the 
     rational response must be that this represents progress. 
     Maybe there could even be a new bi-partisan consensus. At 
     least there would be no harm in exploring that possibility.
       That is not happening. In an egregious example of 
     Washington politics at its worst, Richard Gephardt, the 
     notoriously protectionist House minority leader, complained 
     that the report ``illustrates an extreme neo-isolationist 
     attitude'' towards the IMF and the World Bank. ``Pots'', 
     ``kettles'', ``calling'' and ``black'' come to mind.
       True, this is a radical report. The most controversial 
     recommendations on the IMF are that it should cease long-term 
     lending to the poorest countries and should provide emergency 
     assistance almost exclusively to countries that have pre-
     qualified for it. Similarly, it suggests that the World Bank 
     should cease to be a lender to middle-income countries with 
     access to private markets.
       These ideas do go too far, but they are not crazy. Given 
     willingness to compromise, they could be the basis for 
     discussion between the two sides. The alternative is 
     certainly worse. Continued bitter partisan disagreement, with 
     one side committed to defense of the status quo and the other 
     to radical transformation, must make the environment for 
     these institutions extraordinarily difficult.
       The world urgently needs a U.S. consensus on policy towards 
     the international financial institutions. This report is at 
     least the basis for a discussion--and jaw jaw is certainly 
     better than yet more partisan war war.

     

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