Finance ministers representing the poor countries within the International Monetary Fund warned today that "unless the adverse trends in the international economy are reversed, the whole international system of trade and finance could collapse."
In what promised to be the first shot in a week-long battle for expanded resources for the IMF and World Bank, these nations -- through their Intergovernmental Group of Twenty-four--issued a communique demanding a "world recovery program to stimulate noninflationary growth" in rich and poor countries alike.
The G-24 has been meeting here for two days. It is the first stage of a series of international meetings dealing with growing world economic troubles that will culminate Monday with the joint annual conference of the bank and IMF.
Underlying the growing tensions about world financial weaknesses, bank President A.W. Clausen told the G-24 at the start of its session today that "financial conditions are uncertain, and the latest developments in regard to the external debts of some nations underscore the need for urgent action on the issues to be discussed here in Toronto."
However, one element of favorable news that is likely to surface Saturday is the intention of virtually all of the non-American contributors to the bank's concessional loan agency to put up their full shares of contributions for fiscal 1983, going part of the way to make up for the American shortfall in these funds.
Sources suggested that if, as it now appears, as many as 25 or 27 of the 32 countries contributing to the International Development Association declare such intentions, they will be able to turn their attention to scrounging together monies for fiscal 1984.
The communique issued by the group of poor nations not only insisted that the IMF quotas--deposits of currencies that can be loaned to poor nations--be "at least" doubled from the present $67 billion total, but that lending conditions, which they said are now too stringent, be substantially eased.
C.A. Jacelon, minister of finance for Trinidad and Tobago and chairman of the G-24, said that, unless there is a major increase in quotas, the situation for the poor countries could take a "very serious" turn.
But because of a split within the G-24, an initial draft of the communique that contemplated rejecting a "crisis fund" was abandoned. The crisis fund has been put forward by the United States as an alternative to a major increase in IMF quotas. It would be designed to take care of situations such as the one created by the need for Mexico to reschedule its debts.
Within the IMF, the American proposal is viewed as a diversionary tactic to gain support for a lesser, permanent increase in IMF resources. But when the issue came up within the G-24, Nigeria and Colombia indicated they might favor creation of such a fund.
When this dispute could not be settled within the G-24, all references to a crisis fund were eliminated. The final draft of the communique said instead that "there is no effective substitute for a straightforward and sufficient increase in quotas to enable the fund to discharge its due responsibilities commensurate with members' needs."
When asked about this matter, Jacelon said at a press conference that, to deal with an immediate shortage of funds, "There could be some justification for borrowing by the IMF," but he refused to elaborate. In addition to the demand for bigger quotas and for more funds for the IDA, the communique detailed a long wish list similar to that included in G-24 communiques of earlier years, including a suggestion that the IMF once again resume issuing its monetary credit known as special drawing rights.
The slightly brighter outlook for the IDA stemmed in part from the recent decision of Great Britain and Australia not to cut their donations for next year -- as they are entitled to do -- in proportion to a 35 percent American shortfall.