July 14, 1983
In meetings here today, I have once again asked for congressional approval of the American share of an increase in lending resources for the International Monetary Fund (IMF). The Senate has already approved the request, and the House will take up the measure next week.
The IMF has been a cornerstone of U.S. foreign economic policy under Republican and Democratic administrations for nearly 40 years, and it remains a cornerstone of the foreign economic policy of this administration.
In the past decade the economy has witnessed soaring inflation and interest rates, plunging commodity prices, and worldwide recession. While the international economic outlook is now improving, the experience of past years has contributed to a major international debt problem that poses grave risks for the U.S. and world economies. We have formulated a strategy for dealing with this problem, and IMF plays a key role in it. IMF resources, however, are running low and unless action is taken to increase them, IMF may no longer be able to play that role.
Some argue that increasing IMF resources is simply a way to bail out big bankers who made imprudent loans. This is wrong. In fact, IMF involvement has brought more, not less, participation by private banks. It is important to remember that IMF makes no gifts, that it lends money to governments, and that it charges interest on its loan and assures that proper economic policies are in place to correct the problems and to assure that the loans are repaid.
All of this is very important to the American economy. In 1980 U.S. exports accounted for 19 percent of the total production of goods and, during the decade of the seventies, export-related jobs rose 75 percent to over 5 million. The ability of IMF to deal with the current strains in the international financial system will have a powerful impact on American exports and on American jobs. If IMF is not in a position to help countries help themselves, our economic recovery could be aborted and unemployment start rising again.
Therefore, I urge the House of Representatives to act favorably on this legislation. No legislation now before the Congress is more important to a healthy world economy and to a continuing economic recovery here in the United States.