The Saudi Arabian government will add to the emergency resources being collected by the International Monetary Fund to deal with Third World debt problems, the Saudi minister of finance, Mohammad Abal-khail, said yesterday.
The Saudis would join the United States and 10 other leading industrial nations who already have agreed to boost a special line of credit from $7 billion to $19 billion and to make the money available to any IMF member nation during an international debt crisis, rather than limiting the assistance to themselves.
The largest industrial nations, known as the Group of Ten, plus Switzerland, agreed last month in Paris to increase the credit pool, called the General Agreements to Borrow (GAB).
Abal-khail's announcement came as the IMF's Interim Committee began the first day of a two-day session here on a related measure that would raise by about 50 percent the fund's normal lending resources--the quotas, or deposits by members.
Abal-khail said that it was the willingness of the other 11 wealthy nations to extend these credits to all IMF members that persuaded Saudi Arabia to contribute.
In a communique after a brief meeting yesterday morning conducted by French Minister of Economy and Finance Jacques Delors, the G10 ministers expressed their gratification that the Saudis, although not GAB members, would enlarge the $19 billion fund. There were no precise indications of the amount, but guesses ranged upward of $2 billion.
Indications late yesterday were that Treasury Secretary Donald T. Regan, the American governor for the IMF, still was resisting pressure from his opposite numbers among the major industrial nations to agree to a 50 percent increase in IMF quotas, from the equivalent of about $66 billion to $99 billion.
IMF sources told The Washington Post this week that its lendable pool of funds will be down to a scant $8 billion at the end of February after its commitments to Brazil are fulfilled.
The quota issue was also the main topic of conversation at a private meeting Wednesday night of the so-called Group of Five--the finance ministers of the United States, Japan, West Germany, France and Great Britain.
Regan, who for weeks has been saying that the increase should be between 40 and 50 percent, reportedly was trying to stay closer to 40 percent, which would mean that his subsequent request to Congress to authorize the American share could be slightly more modest. Many congressmen on both sides of the political aisle have indicated that an increase of $8 billion or more in U.S. pledges for the expanded IMF and GAB will have a difficult course through Congress.
The demand on Wednesday for a doubling of quotas made by the poor-nation contingent within the IMF, the Group of Twenty-Four, was brushed aside in private conversation as impractical. Privately, G24 members said they knew the request would not get anywhere.
The G24's insistence on the need for a move toward a "reflationary" policy to defeat worldwide recession is also likely to be ignored by the Interim Committee, which is going ahead with its plans to stick with an anti-inflation policy, and its own demand that the borrowing countries hold their economies in check.