SUMMIT DEEPENS IMF COORDINATION ROLE,OFFICIAL SAYS
The Venice summit accord gives the
International Monetary Fund (IMF) increased responsibility in
smoothing vital economic cooperation between industrial
countries, a senior IMF official said.
    The official, who met reporters but asked not to be
identified, made clear that the use of a series of economic
measurements to monitor the seven leading industrial
democracies would be difficult but was a major step in
cooperation.
    The United States, Japan, West Germany, France, Britain,
Italy and Canada agreed at the summit to use a series of
economic indicators to forecast economic behaviour in an
attempt to increase cooperation on economic policy.
    The setting of a formal process of review, while seen as a
step forward in the cooperative effort, was also criticised
because it lacked teeth to force a country to change economic
behaviour that hurt other countries.
    But the official said influences and peer pressure could
have a major impact in reforming an erring country.
    Economists generally believe a cooperative economic
approach by the largest countries will have a salutory impact
on the global economy, including helping the poorest debtor
countries.
    The official said the IMF function would be to warn
countries when their economic behaviour was straying badly and
try to persuade them to modify it. "I hope it will be a yellow
light, not a red flag," he said.
    He also said he hoped negotiations would begin in the next
few weeks to increase the IMF's structural adjustment facility,
which helps 62 of the world's poorest countries.
    The facility, approved about 15 months ago, is currently
financed at about 3.8 billion dlrs, but this would be tripled
under the plan.
    He said reaching an accord on the agreement would be very
difficult, with countries pressing each other to do more and
finding reasons to reduce their own exposure. "They will be
tremendously difficult negotiations," he said.
 REUTER
