IMF OFFICIAL RESIGNS CHARGING U.S. LOAN PRESSURE
One of the top executives of the
International Monetary Fund (IMF) has tendered his resignation
charging that the United States has been pressuring the agency
to reduce the conditions it places on some loans, monetary
sources said.
    C. David Finch, an Australian who heads the IMF's exchange
and trade relations department, told the IMF executive board on
Wednesday that he planned to leave by the end of next month
after 37 years with the agency.
    The sources said that Finch, in a statement considered
unprecedented, told the board that the United States had
brought undue pressure on the IMF to approve funding for Zaire
and Egypt.
    "To resign in this manner is highly unusual, perhaps
unprecedented," a monetary source said.
    Neither Finch nor U.S. IMF Representative Charles Dallara
could be reached for comment.
    The IMF, since the emergence of the debt crisis in 1982,
has pressed many countries to tighten their belts and cut back
on social spending as conditions to granting assistance.
    The United States recently has been taking the position
that countries that take needed economic reform measures
relying more on market forces and private enterprise should be
encouraged by assistance from the IMF and development banks.
    Zaire, under the government of President Mobutu Sese Seko
has recently been taking many reform measures designed to heal
its ailing economy.
    The IMF last year approved a 22-month loan package for
Zaire totaling 270 mln dlrs.
    The United States has been considering the possibility of
seeking access to a military base in Zaire but no decision has
been reached.
    Egypt, for its part, has been holding talks with the IMF
aimed at reaching a final accord on a new one billion dlr loan
package with the United States pressing for a quick deal,
according to the sources.
    However, they said a tentative plan for Egypt that is
currently being reviewed by the management of the Fund prior to
going to the executive board for full approval has raised a
number of questions about the country's ability to repay.
    Egypt is also a linchpin in the broad framework of U.S.
Middle East policy.
    The department headed by Finch, among other
responsibilties, makes certain that IMF policies and loan
conditions are wielded evenly among countries.
    Monetary sources have said that the United States had
brought pressure on the IMF to approve a loan package for
Mexico using economic conditions that have not been broadly
used before, but Finch, according to the sources, made no
reference to this.
    Under the debt initiative announced 18 months ago by
Treasury Secretary James Baker, the United States made the
decision that debtor countries should be encourged to grow out
of their difficulties rather than rely on austerity measures.
     He also recommended that commercial banks provide 20
billion dlrs in new loans for the debtor countries while the
mutilateral banks add some six billion dlrs over three years.
    A key part of the proposal gave the World Bank a much
greater role in dealing with the debt crisis, in part because
of its familiarity with developing countries and their
problems.
    The initiative, while widely heralded as a good first step
toward improving the the growing debt crisis, was viewed by
some at the IMF as a rebuke of previous austerity measures
insisted upon by the Fund in return for loans.
 
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