NYT: I.M.F. Loans to Rights Violators Are Attacked in Congress (fwd)

[Robert Weissman <rob@essential.org>]

April 22, 1998

I.M.F. Loans to Rights Violators Are Attacked in Congress

By DAVID E. SANGER

<Picture: W>ASHINGTON -- Every year, the State Department's human rights 
report dwells at length on Indonesia's many forms of political repression, 
from its use of torture and killings to silence dissenters to its widespread 
military control of East Timor.

So Indonesia's record might appear, at first glance, to require the use of a 
law compelling the United States to vote against lending billions of dollars 
through the International Monetary Fund to gross violators of human rights. 
But the United States favored a $40 billion IMF bailout of Indonesia, and 
even offered to throw in $3 billion of backup American financing if 
Indonesia needs more.

On Tuesday, defending that decision during two hours of hostile questioning 
by a congressional committee, Treasury Department officials asserted that in 
the pantheon of human rights violators, the government of President Suharto 
did not rank among the worst of the worst.

"The State Department makes these judgments, and Indonesia did not meet the 
standard to be on the list they send us," Timothy Geithner, the assistant 
secretary of the Treasury, said in testimony as he urged Congress to approve 
an additional $18 billion for the monetary fund.

The debate over providing additional funding has turned into one of the 
hottest foreign policy issues on Capitol Hill this year. It has become a 
magnet for human rights activists, abortion opponents and critics of the 
monetary fund's role as the world's lender of last resort.

The testimony Tuesday called into question whether the administration, in 
its race to contain the Asian financial crisis, skirted a law that requires 
the United States to use its "voice and vote" to deny assistance to 
countries that "engage in a pattern of gross violations of internationally 
recognized human rights."

The State Department insists that it keeps no official list of human rights 
violators that should be denied such loans. But, responding to questions 
Tuesday, Geithner said there were five countries that the United States 
would likely oppose for such aid: China, Sudan, Equatorial Guinea, Iran and 
Mauritania.

"I concede," one senior administration official said Tuesday, "that to the 
uninitiated it is a bit of a strange list."

Clearly, it has a number of gaping holes. For example, Nigeria, a country 
that has seen widespread violence and political repression since a 1993 
coup, would not be automatically denied American support. Nor would Iraq, 
which is barred from borrowing money from the IMF because it has not repaid 
loans for the last eight years.

At the hearing Tuesday before the House Banking subcommittee on general 
oversight and investigations, Rep. Bernie Sanders, I-Vt., who ranks among 
the fiercest critics of the monetary fund in the House, charged that the 
administration violated the law. "You are funding a vicious dictator who 
jails his opponents," he said. "It seems to me you very clearly disobeyed 
the law."

Geithner and Karin Lissakers, the U.S. representative to the monetary fund, 
insisted that the administration, working behind the scenes, has used its 
influence to promote both human rights and labor rights. It has blocked the 
IMF from considering loans to Iran and Sudan, they said, and held up money 
for Croatia while it was harboring war criminals.







The human rights argument is part of a broader examination of the workings 
of the fund that has never before taken place in Congress. The fund is known 
for its secretiveness, in large part because it offers confidential advice 
to its 182 member countries, many of which turn over sensitive economic data 
to the fund.

But that secretiveness has also made it difficult for the United States to 
defend its support of the fund, or discuss specific decisions. Now, 
increasingly fearful that the funding it seeks could be denied, Washington 
has begun to turn over thousands of pages of data about its interactions 
with the fund.

Each disclosure, though, has raised new objections. Some Republicans argue 
that the IMF should not provide below-market-rate loans to recipient 
countries; Sanders argued the opposite Tuesday, maintaining that the fund 
has turned into a "loan shark," deeply burdening indebted countries with 
even more interest payments.

Sen. Ted Stevens, R-Alaska, chairman of the Appropriations Committee and an 
ardent IMF supporter, said Tuesday that the $18 billion financing package is 
"in trouble" on Capitol Hill because of stiff resistance in the House.

Stevens said House and Senate negotiators are to meet on Thursday to begin 
hammering out differences in their respective emergency spending bills to 
finance military operations in Bosnia and the Persian Gulf.

The Senate's version of the bill includes the $18 billion for the IMF. The 
House version does not.



Copyright 1998 The New York Times Company