Fears that Third World debts would overwhelm the international finance system have not materialized and "there does not exist a global debt crisis," the head of the International Monetary Fund said yesterday in an optimistic speech.
Jacques de Larosiere, managing director of the IMF, said at the University of Neuchatel in Switzerland that world confidence is being rebuilt by signs of "modest and gradual" economic recovery in major industrial nations and by shrinking deficits in Third World countries.
But he said it is essential that the industrial nations' recovery that is "now anticipated be . . . realized and sustained." In part, he warned this would depend on commercial banks maintaining a steady flow of funds to Third World borrowers.
De Larosiere revealed that the total current account deficit (goods and services) of non-oil producing poor countries "now appears to be moving into a more viable range." For fiscal 1983, the aggregate deficit is estimated at $70 billion, down from $90 billion in 1982 and $100 billion in fiscal 1981.
IMF officials said that the estimate of the LDC current account deficit--made some weeks ago--does not reflect sharply lower world oil prices, which would reduce the LDC deficit even more. The $20 billion improvement in the LDC deficit is attributed to lower interest rates and prospects for recovery among richer nations that will stimulate LDC exports.
De Larosiere's upbeat tone contrasted with the mood at the meeting of the IMF's policy-making Interim Committee on Feb. 11. Then, noting downward revisions in growth expectations and "the weakness of investment and world trade," a press communique had spoken of "only limited indications of economic recovery."
The Interim Committee explicitly rejected pressures by some nations to emphasize expansionist global policies.
But yesterday, de Larosiere said that "there is general agreement that the achievement of sustainable growth constitutes the central objective of economic policy."
He added that "it is widely accepted that a durable economic recovery depends on the continuing credibility of anti-inflation policies."
But mention of growth took precedence over anti-inflation policies in the de Larosiere speech. IMF sources acknowledged that there had been a subtle shift in emphasis.
De Larosiere said the international financial system had shown "its resilience and its adaptability" in meeting recent strains, caused in large part by the depressing results of high interest rates. A new IMF tally showed that for 20 of the biggest LDC debtors, servicing of their loans last year took 40 percent of export earnings--almost three times the normal ratio of the mid-1970s.
De Larosiere said that the better outlook for 1983 would cut that debt-service ratio to 31 percent.
The IMF executive, deeply involved in expanded loan arrangements to the three biggest debtors--Mexico, Brazil and Argentina--concluded that "current liquidity problems can be resolved," provided the recipient nations put reasonable economic adjustments of their own into effect.
De Larosiere went out of his way to deny that the IMF has an antigrowth attitude. To the contrary, he asserted that the fund's policies "are essentially designed to restore domestic and external balance in the economy, and thus to set the right conditions for sustainable growth over the medium term."
Critics have said that austere conditions demanded by the IMF would short-cut the rapid growth rates that countries like Mexico--now in deep financial trouble--had achieved in recent years. To rebut this argument, de Larosiere said in 19 of 26 recent cases, real growth rates are expected to improve during the first program year of proposed IMF loans, compared with the prior two years.
Mexico, it is learned, is not among the 19, but is expected to resume rapid growth after the second year of the IMF standby loan. "It's difficult to turn a big country around overnight," an IMF official conceded.