Third World countries should not look to the International Monetary Fund for "an uncontrolled expansion" of its lending facilities to solve all their troubles, IMF Managing Director Jacques de Larosiere warns in a speech scheduled for delivery today.
De Larosiere, who will address the United Nations Economic and Social Council in Geneva, notes that the IMF is "a monetary institution" helping member countries to make economic adjustments, rather than a development aid institution, like the World Bank.
De Larosiere's definition of the current IMF role closely parallels the limitations set by the "Group of Ten" rich nations recently in Helsinki. The distinction between a monetary institution and a development agency is also one that is also being pushed hard by the Reagan administration. However, it still is being resisted by some smaller nations, and the topic will be further debated at the IMF's annual meeting in Toronto in September.
De Larosiere's speech, scheduled for 6 a.m. Tuesday, Washington time, was released for publication in U.S. morning papers by the IMF here.
The poorer nations in the IMF have complained that the IMF recently has attached stricter conditions to its loans, in response to pressures from the richer nations. De Larosiere conceded that in the present "difficult world environment, the national policies that are required to restore payments viability are, of necessity, more stringent than in earlier and more stable times.
"Hence, the perception by some that conditionality has been tightened does not derive from any change in the fund's policies, but reflects the realities of the current situation and the scale of the payments deficits that have to be corrected."
Nonetheless, Reagan administration officials appear to be satisfied that the IMF has been somewhat tougher in its lending policy, and is scaling back some its original ideas for expanding its lending potential. In an interview last week, Treasury Undersecretary Beryl Sprinkel said he was satisfied with the "progress" the United States had made in these areas at the Interim Committee meeting in Helsinki last May.
"There has been extensive discussion on the role of the IMF and I would not want to argue that everyone has now agreed that it ought to be strictly an international monetary institution devoted to short, intermediate-term loans for balance of payments purposes," Sprinkel said. "But at least the bulk of the membership is moving in that direction. And I wouldn't expect that all of them will ever arrive there, at least that they would say so openly."
The fund, which now has deposits (called quotas) totalling about $60 billion in various national currencies, is discussing new and larger quotas that are scheduled to be agreed upon by the end of next year. At one time, the IMF staff hopefully talked of doubling the quotas. But de Larosiere's Geneva rejection of "uncontrolled expansion" appears to rule that out.
In the interview, Sprinkel said that discussions at Helsinki indicated that "at least we're getting to quota numbers that may be do-able, instead of off-the-wall." At the Versailles economic summit, the major nations agreed, under pressure from French President Francois Mitterrand, to make progress at Toronto "towards settling" the quota size issue.