Treasury Secretary Donald T. Regan conceded yesterday that an administration request to Congress for $1.3 billion for the World Bank's soft-loan fund, the International Development Association, is in deep trouble.
At stake is a $245 million supplemental request for fiscal 1983, plus $1.095 billion for fiscal 1984, to complete the United States contribution to the current IDA loan program, known as IDA-6, which provides low-interest loans to developing nations.
Following testimony at a Senate Appropriations subcommittee in which Regan urged Congress, in the strongest possible language, to honor the commitment it had already made to provide these funds to IDA, the Treasury official confessed to reporters:
"I'm afraid the whole appropriation for IDA is in trouble--dammit!" Asked what the administration proposes to do now, Regan shrugged and said: "We will have to work on it." IDA is the main source of development aid money for the world's poorest countries.
Subcommittee Chairman Sen. Robert W. Kasten Jr. (R-Wis.) said flatly at the start of the hearing that there was little prospect that Congress would pass the supplemental request for fiscal 1983. Congress, Kasten said, is much more concerned with the need to expand the resources of the International Monetary Fund.
Because of recession at home, "foreign aid is difficult to get through Congress," Kasten said. He added that the administration should concentrate on trying to get its request for the IMF passed, because there is more bipartisan support for that agency than for IDA. Even the IMF appropriation request, most congressional sources report, faces an uphill fight.
In response to an inquiry by The Washington Post, World Bank President A.W. Clausen said that he had been assured by American officials "that best efforts will be made to complete U.S. payments to IDA-6 within four years. We firmly believe that such best efforts will indeed be made."
Clausen added: "It would be most grave for the poorest developing nations and indeed for the solidarity between the 33 IDA donor nations if there were further delays in the completion of IDA-6. We are confident at this time that there will not be such further delays."
Bank sources said that other contributing nations, which begin talks this summer on the next "replenishment" of funds for IDA--the IDA-7 program, scheduled to begin July 1, 1984--would be dismayed by congressional failure to come through with the $245 million supplemental for fiscal 1983. "They may conclude that this is not the time for them to commit funds for an IDA-7," said an official.
Regan admitted that failure of Congress to come through with the money owed to IDA would "play havoc with IDA's plans," and again raise the question of America's willingness and ability to live up to its international commitments. If Congress fails to approve the supplemental, it almost guarantees than the $1.3 billion then due IDA could not be fully appropriated in fiscal 1984.
In effect, Congress would be stretching out to at least five years what had started out as a three-year program. Originally, U.S. contributions totalling $3.2 billion for IDA-6 (out of $12 billion from all nations) were to have been concluded in three years ending in fiscal 1983.
But as Regan pointed out yesterday, Congress appropriated only $500 million in fiscal 1981, and $700 million a year in each of fiscal 1982 and 1983, pushing the program into a fourth fiscal year.
After long negotiations, the other donor nations took up some of the slack by releasing their 1982 and 1983 installments in full to IDA, and last year agreed on a $2 billion emergency package--in which the U.S. is not participating--to sustain at least a $2 billion lending rate for fiscal 1984.
For all the multilateral development banks, Regan yesterday listed fiscal 1984 requests for $1.6 billion in budget authority and $2.8 billion in callable capital.
In a question and answer session, Regan told Kasten that if one of these development banks, the Asian Development Bank, expels Taiwan in order to seat the Peoples' Republic of China--which has applied for admission to the bank, the United States would "have to take a second look" at whether it would continue to help finance the bank.