Treasury Secretary G. William Miller last night urged Congress to approve funding for several international financial organizations, including the World Bank and International Monetary Fund, because it "is in our basic self-interest."
"These institutions are the centerpiece of our efforts to restore stability and growth to a troubled world economy, strengthening the foundations for broad political cooperation," Miller said in a speech to the Chicago Council of Foreign Relations. A text of the speech was released here.
"In hard times, such as we are experiencing now, there is always a temptation to retrench, to cut back on our support for international organizations that seem to have no domestic constituency," he declared.
"That would be a tragic mistake," Miller warned.
A congressional conference committee is expected to meet today to try to find a way out of an impasse over funds for the International Development Association, the part of the World Bank that lends to the poorest nations charging little or no interest.
The House of Representatives twice has rejected an administration-backed bill that would authorize a $3.24 billion increase in U.S. commitments to IDA. However, only 27 percent of that amount would actually be paid out over an 8-to-10-year period, a high Treasury official noted. The remainder would be "callable capital" and be used only in the remote event of massive defaults on loans.
Nevertheless, the administration reportedly has agreed to a 10 percent reduction in the U.S. funds for IDA as part of the price for getting congressional approval for the commitment negotiated with other industrial and developing nations nearly two years ago.
Also being delayed are authorizations for funds for three regional development banks, the Inter-American Development Bank, the Asian Development Fund and the African Development Fund. An increase in the U.S. quota at the International Monetary Fund has cleared both House and Senate committees and is awaiting floor action.
"The proposed increase in IFM quotas will help to assure that the IMF can continue to meet its responsibilities for international monetary stability in a period of strain, danger, and financial uncertainty," Miller told his Chicago audience.
And he added, "our contributions to the multilateral development banks provide the most cost-effective means of supporting U.S. humanitarian, economic and foreign policy objectives in the developing nations, while directly benefiting U.S. exports, production and jobs."
Miller said loans by these development banks are the largest official source of external capital for the developing world and "contribute in a major way to economic growth and stability in recipient developing countries."
In additgion, he said, "The developing nations are today -- at a time of a general slowdown -- the main area of world economic growth. Growth generates increased imports -- and non-oil developing countries now take 20 percent of total U.S. exports, 25 percent of our exports of manufactured goods, and support more than half a million U.S. manufacturing jobs."
Stressing these direct economic benefits to the United States from support of the international lending institutions, the Treasury secretary zeroed in on Illinois.
"Illinois is our third largest exporter of manufactured goods and our top exporter of agricultural products . . . One-third of these exports went to developing nations . . . In 1978 alone, 175 Illinois firms were contractors on Wqrld Bank projects," he said.
During 1977-78 every dollar contributed to the multinational development banks, he continued, resulted "in an increase of U.S. GNP of three dollars. Moreover, that higher output of goods and services in the United States raised both federal and local tax revenues by enough to offset the entire cost of the contributions in the first place, he said.
Miller said oil price increases during the last year or so are contributing to slower economic growth around the world and higher inflation everywhere, particularly in the developing countries.
Under such circumstances, he declared, "An inward turn is not a solution to the political threat (to the United States in Iran and Afghanistan) or to the world's economic problems."