Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (5708)	1/12/1998 5:23:00 PM
From: lorne	Respond to of 116757

BAILOUT BACKLASH Tuesday, January 13, 1998 Foes of IMF plan rally to fight Clinton By JENNIFER HEWETT, Herald Correspondent in Washington As United States officials fan out through South-East Asia to increase governments' support for the policies of the International Monetary Fund, the Clinton Administration is facing a growing revolt against the IMF in Washington. A series of meetings of critics this week will attempt to derail US plans to extend more funds to the IMF, including cutting off access to the billions of dollars the US has pledged to the rescue packages for Indonesia and South Korea. Legislators and lobbyists say the coalition of conservatives and liberals within Congress aims to defeat the Clinton Administration's request to give the IMF nearly $US19 billion ($30 billion) to boost its resources, drained by multi-billion-dollar bailouts for South Korea, Indonesia and Thailand. Coalition members say they will also propose legislation to change the way the IMF gets its funding and to keep President Bill Clinton from offering huge loans to countries in financial trouble without approval from Congress. This will undercut an emergency round of visits to the region by senior US officials, including the Secretary of Defence, Mr William Cohen, and the Deputy Secretary of the Treasury, Mr Larry Summers, to persuade leaders, especially Indonesia's President Soeharto, of the need to follow IMF prescriptions. The Clinton Administration decided on the all-out effort after it became clear that the turmoil in Indonesia - and the Soeharto Government's reluctance to institute reform - had the potential to unravel the entire system of IMF bailouts and destroy confidence throughout the region. The domestic opposition in the US is an unlikely but potent alliance of groups which are united in their mistrust of the IMF. The liberals argue that the IMF conditions are unfair to ordinary people and will only make their lives harder by crippling the economies of the region. Conservatives argue that US taxpayers should not rescue banks which have made bad lending decisions and that such bailouts set a bad precedent which will only encourage similar behaviour. The failure of the IMF package to stabilise the situation in Indonesia is only making the criticism stronger, even though the crisis in South Korea has eased temporarily. This will make it difficult to persuade Congress to pass pending legislation to extend an extra $US3.5 billion line of credit to the IMF and to increase the US share of contributions by an additional $US15 billion. Although Congress is still in recess, members are starting to organise concerted opposition and proposing early legislation to block US support for the IMF. So far, the US has been able to pledge funds to South Korea and Indonesia by using a special emergency fund which does not require Congressional approval. But there will be attempts to close this loophole as soon as Congress resumes. The meetings of critics in Washington this week range from gatherings of conservative Republicans to a protest organised by Friends of the Earth. One of the most influential committee chairmen in the House of Representatives, Mr Bill Archer, a Republican, said Congress would look closely at the IMF bailouts to see whether they stabilised the countries and whether they were in the best interests of the US. The Clinton Administration did get some assistance from a nominal ally who often opposes the White House, the Democrat House leader, Mr Dick Gephardt. However, many Democrats are deeply opposed to the harshness of the IMF conditions. The National Security Adviser, Mr Sandy Berger, said that the best prospect for countries trying to restore confidence and stability was to continue on the path of economic reform.