MEXICO SEES COMPROMISE ON IADB REFORMS
There is a good chance that the United
States and Latin America will agree reforms in the
Inter-American Development Bank (IADB) as a result of talks
yesterday with U.S. Treasury Secretary James Baker, Mexican
Finance Minister Gustavo Petricioli said.
    "This is a complex issue, but I am very optimistic on an
agreement, he told reporters during the IADB's annual meeting
here.
    The U.S., which holds a 34.5 pct stake in the Bank, has
proposed lowering the veto power to 35 pct, a move strongly
opposed by Latin countries which together hold 54.2 pct.
    Petricioli said he saw the basis for a compromise when the
issue comes up again during the International Monetary Fund and
World Bank interim meetings next month in Washington.
    He said Baker had indicated receptivity to Latin America's
position during talks yesterday with the so-called "A"
countries - Brazil, Argentina and Mexico - who stand to suffer
a net deficit of IADB funding unless the Bank votes a
substantial capital increase.
    Proposals are on the table for a seventh replenishment of
funds totalling 20 billion dlrs for the period 1987-90, plus
2.9 billion carried over from the sixth replenishment.
    But Washington has previously said it would not agree to a
nine billion dlr increase in its subscription unless reforms
were agreed, a position described today by Nicaragua's Central
Bank governor Joaquin Cuadra Chamorro as undemocratic.
    Petricioli nevertheless said Baker showed "flexibility in
being prepared to accommodate different proposals" and promised
to look into alternatives.
    He said an alternative now being looked at was for new
procedures for delaying IADB loan approval, to satisfy U.S.
concern that lending is currently too lax, rather than a change
in the basic voting structure.
    There would accordingly be a two-step procedure whereby it
would need just a 35 pct vote to delay loan approval for a
year, after which a second review would require a 40 pct
blocking vote.
    "Any change in the basic voting structure would require a
change in the IADB's charter, and in turn a lengthy process of
prior approval by the Congresses of each country," Petricioli
said. In common with Venezuela, he expressed reservations on
the conditions that might be placed as a result of Washington's
proposals for increased IADB sectoral lending, but welcomed a
bigger role for the Bank in U.S. debt strategy.
 Reuter
