IPS on IMF/Appropriations (fwd)

[Robert Weissman <rob@essential.org>]

Copyright InterPress Service, 1998
FINANCE-US: Congressional Committee Denies IMF Funds</TITLE>
	By Abid Aslam
WASHINGTON, Sep 11 (IPS) - A key Congressional committee has  
rebuffed a U.S. administration request for 18 billion dollars for  
the International Monetary Fund (IMF) and approved a much smaller  
sum.
   With days remaining before a vote on the issue in the House of  
Representatives, the House Appropriations Committee's action late  
Thursday dealt a blow to administration and IMF hopes of winning  
14.5 billion dollars to expand the Fund's capital base, made up of  
membership dues or 'quotas'. <P>
	Instead, it passed only 3.5 billion dollars for an emergency line  
of credit to help the agency cope with financial crises.     <P>
	The long-running battle over IMF finances was far from over,  
political analysts and legislative sources said. The quota  
increase could be added as an amendment for the 435-member House  
to consider. A full vote, scheduled for Sep. 15, could be delayed  
as Representatives focus their attention on possible impeachment  
proceedings against President Bill Clinton. <P>
   Full funding also could emerge from a compromise process even  
if the House passed only 3.5 billion dollars. The Senate last week  
approved the full 18 billion dollars and any differences between  
the two chambers would have to be ironed out. <P>
   ''Even if the bill is passed by the full House as is, it would  
still have to be reconciled with the corresponding Senate  
bill...in one of those great exercises of democracy, the  
conference committee of a few chosen Representatives and Senators  
who go behind closed doors to work out a compromise,'' says Soren  
Ambrose, policy analyst with the 'U.S. Fifty Years Is Enough 
Network'. <P>
   The outcome could prove make-or-break for the IMF, which has  
sought a quota increase since 1995. Financial expansion must be  
ratified by counties holding a combined 85 percent of votes in 
the IMF. Japan and Germany had promised to raise the necessary  
cash but the United States, with an 18-percent stake, remained  
key, a Fund source said. <P>
   The appropriations committee's 30-22 decision to deny full  
funding came despite last-minute urging from White House Budget  
Director Jacob Lew. ''To reject or delay this funding not only  
would undermine America's leadership in the world, it also would  
expose American workers, savers, farmers, and business to  
unacceptable economic risks,'' Lew wrote to Bob Livingston, the  
committee's Republican chairman. <P>
   It also followed hearings on the IMF's role in Russia's  
economic collapse, held by the House Banking Subcommittee on  
Government Oversight and Investigation, in which Russian and  
American commentators from the left and right wings described  
Russia as a political and economic shambles and blamed the Fund  
for contributing to the crisis. <P>
   ''Clearly, Congress should not be giving the IMF one more  
nickel of U.S. taxpayers' money to perpetuate its failed  
policies,'' Rep. Bernard Sanders, an Independent and ranking  
member of the oversight subcommittee, said following the  
appropriations committee's vote. ''We need to help people in  
nations like Russia, but not through the IMF. Current IMF policy  
is only protecting foreign speculators, international banks and  
crooks in Russia, and creating misery for millions of ordinary  
people.'' <P>
   Appropriations committee chairman Livingston, an IMF  
sympathiser, voted against the 18-billion-dollar request Thursday  
but told committee members this was to buy time to draw up more  
stringent conditions for IMF operations. Likely demands include  
less secrecy and greater accountability at the Fund and limits on  
emergency lending in Russia, according to political sources. <P>
	The sources were sceptical that conditions could be made to stick  
and noted that, in the past, these had been honoured mainly in the  
breach. <P>
   Under U.S. law, Washington's representative on the Fund's  
executive board is required to ''regularly and vigorously'' pursue  
setting up an audit department to review what impact the agency's  
policy prescriptions were having on poverty and the environment in  
borrowing countries. The U.S. executive director also is mandated  
to use ''voice and vote'' to oppose loans for countries running  
afoul of human rights and environmental norms. <P>
   Earlier this year, however, U.S. executive director Karin  
Lissakers told lawmakers that she seldom voted against such loans  
because the IMF board tended to avoid votes in favour of consensus  
on major decisions. Additionally, Lissakers - asked by lawmakers  
to clear up contradictory claims about the IMF's financial state  
of health - admitted that the agency's accounting system ''is not  
fully transparent to me as a layman in this area.'' <P>
   Sanders and other authors and backers of the reform legislation  
were outraged by the admissions and lingering disenchantment with  
past attempts at constructive engagement may help stiffen  
opposition to full funding when the House votes on the measure,  
said political analysts. <P>
   IMF opponents ''may well predominate,'' Livingston told  
reporters, but ''my suspicion is that there is enough support  
among both parties in both houses that you're going to have an  
IMF.'' <P>
   Resolution of the matter has been postponed by a series of  
unrelated issues, including squabbles over abortion policy  
overseas. Tuesday's House vote could be pushed back as lawmakers  
debate the long-awaited results of independent counsel Kenneth  
Starr's investigation of President Bill Clinton and weigh the  
possibility of impeachment. Said one legislative aide, ''It's  
going to be ugly.'' (END/IPS/aa/mk/98)