Striking a more optimistic note than most of his fellow finance ministers, Treasury Secretary Donald T. Regan told the annual meeting of the World Bank and the International Monetary Fund yesterday that "there is reason to expect gathering economic strength" in the industrial world over the coming year.
Acknowledging that the plight of many of the poor member countries of these two organizations is still serious, Regan nonetheless said that the surpluses of the oil-cartel nations will decline more than expected, with a parallel improvement in the poor nations' deficits.
At a press conference, Regan also:
Reaffirmed the administration's policy of not intervening in foreign exchange markets except "in times of crisis." He readily acknowledged that such a crisis could come at a time when the dollar is too strong, as well as too weak.
Observed that even if the United States Gold Commission, which he heads, should recommend a return to a gold standard next year, the United States could not do it alone but would have to negotiate with other nations. "It's not going to happen overnight," Regan said of a return to the gold standard, that is, defining the value of the dollar in terms of gold. He repeated that his own attitude on the subject is "neutral."
In part, the brighter U.S. forecast for the world economy explains the pressure being placed by the American government on the IMF and World Bank to put a brake on their lending activities. Regan said yesterday that with what the United States calls "appropriate" policies on the part of the borrowing countries, the aggregate trade and services deficit of the poor nations next year would show the first reduction since 1977.
Nonetheless, Regan repeated the general pledge of support for both institutions made here Tuesday by President Reagan. Then he spelled out for the first time the precise shifts in approach the United States wants each institution to make.
Regan suggested that the IMF return to what he said was its "original purpose" -- temporary financing of deficits. Elaborating at a press conference, Regan warned that the IMF must not become "an aid agency," or allow its role and that of the World Bank to become blurred.
As for the World Bank, Regan said the emphasis should not only be to rely more on the private sector, but also to induce the less-developed countries to be more friendly to investment by private-sector companies. Regan surprised his audience by saying that he included state-owned enterprises in England and France in that category.
For the most part, the major industrial nations have gone along either affirmatively or passively with the American administration's pitch to place limits on bank and IMF expansion. The one notable exception so far seems to be France, whose prime minister, Jacques Delors, said France favors "a large IMF," as well as greater subsidized aid to the poor nations, including such help from the World Bank.
In his address to the convened ministers, Regan tried to assuage any fears that the United States was giving up its support of multilateralism. But he urged the new president of the World Bank, A.W. Clausen, "to make those policy modifications that will help countries to a greater degree to generate their own momentum; attract participation of private capital in conjunction with bank operations; and, more generally, create an environment in borrowing countries that is conducive to private investment, domestic and international."
He also mentioned that the United States will encourage a change in the bank's financing that will place "less emphasis" on the amount of paid-in capital in relation to total callable capital. In effect, the United States feels that this is a better way of providing resources for such things as development of energy in Third World countries than through a specially created affiliate for the World Bank.
In response to a press conference question, Regan said that "politically, this is not the time to bring up the question" of a U.S. commitment to the next renewal of funds for the International Development Association, referred to as IDA-7. The IDA is the World Bank's auxiliary credit agency for soft loans. "We've had enough trouble getting IDA-6 financed in the U.S. that I think anything additional at this time might be counterproductive."
He added that "there is sufficient time ahead for an IDA-7, and we think that there will be a need for an IDA-7, but of what size, what character, what direction -- these are issues that have to be spelled out before we accept or reject it."
Meanwhile, the 24 nations that had advanced money to the IDA this year despite the United States' failure to produce its first promised installment for IDA-6 on time voted yesterday to advance monies in the second and third years only when the U.S. Congress comes across with the money for the U.S. share. They said the other nations' contributions then would be made only on a pro rata base with the United States'.
On Aug. 24, the United States paid the IDA only $500 million of a $3.24 billion commitment that originally was to have been divided equally among fiscal years 1981, 1982, and 1983.