U.S. Treasury officials believe there should be a new approach by the world's industrialized nations to Third World debt problems and said the issue would be raised by the Reagan administration at the economic summit meeting in Williamsburg later this month, officials traveling with Treasury Secretary Donald T. Regan said
Treasury officials said there are any number of ways in which this could be done, ranging from an informal approach to the formal establishment of a secretariat within the Bank for International Settlements (BIS) in Switzerland or within the Organization for Cooperation and Development in France that would monitor developing country debts and give an early warning signal if one country is getting into difficulties.
An administration official said the United States would probably prefer a less formal structure, such as adding this issue to the usual agenda of the regular meetings of the Group of Five (G5) nations. The G5 consists of the United States, Japan, France, Germany and Great Britain.
Treasury officials, who claim the United States has taken the lead in trying to change the process for coordinating the actions of creditor governments, said the United States would like "to get heads of state on board" at the May 28 summit meeting in favor of a more structured approach to the debt problems.
The financial rescue packages hurriedly put together for such nations as Mexico and Brazil have been worked out on an ad hoc basis, with BIS paying out the non-U.S. portion of these very short-term loans.
Regan told reporters during his trip to the Asian Development Bank meetings here that "we haven't as yet focused in . . . detail on what mechanisms" could be used for ensuring that creditor governments continue to "band together to put up additional funds" in emergencies. He said continued coordination was essential.
Regan said "we want to get the assurances of the heads of state that they agree with this procedure, that we should act in concert in this way," referring to the joint packages of government financial aid put together for Brazil, Mexico, Argentina, and Yugoslavia through the BIS. He said he was calling for "a continuation of this process," saying that "if other nations get into difficulties there's no way the United States can do it alone . . . We have to act together."
As well as coordinating any new emergency packages, it would be helpful if governments shared their information on debtor nations, the Treasury official said, adding that it was surprising how many other governments were startled by Mexico's brush with bankruptcy.
Regan also said in his speech to the ADB's annual meeting that the United States could not lead the world into economic recovery on its own. Regan's comments were apparently in response to comments from other nations, particularly France, that the United States should take the leading role in fighting recession.
"No single nation can be the engine for world recovery," Regan said in his speech. "To the contrary, the current economic situation requires that all industrialized nations work together to . . . the common goal of solid non-inflationary economic expansion."
The United States had been highly critical of France's economic policy until recent austerity measures were taken. However, Regan did stress the need to fight unemployment and get the world economy moving. "The inflationary fires that were troubling us so much at Ottawa the site of the 1981 summit and Versailles 1982 seem to have subsided, " he told reporters. "But now the problem facing not only the industrialized nations but indeed most nations of the world, including many here . . . is high unemployment. . . it is something that we all have to come to grips with."
Regan warned that unemployment can lead to social unrest and political upheaval. He later told a group of American and Philippine businessmen here that growth "will require a reinvigoration of international trade, and that requires financing. No growth without trade and no trade without credit."
Regan would not comment in detail on the major political issue at the meetings here, which is the question of whether the People's Republic of China should join the Asian Development Bank. The PRC has said that it would like to join, but only if Taiwan is expelled. China described as "blackmail" congressional moves to make the United States leave the bank if Taiwan is forced out.
Regan said the United States has no official position yet but will wait to let the bank management take a position. However, he told reporters that "we recognize that Taiwan is a member of the bank . . . and has a right to remain a member of the bank."
Behind the scenes, the U.S. delegation has been working to see if there could be a possible compromise involving a change of name for Taiwan, a U.S. official said. Other officials said it was unlikely the PRC would accept this.
Regan told reporters the Reagan administration would not be bound by a congressional resolution for U.S. withdrawal from the bank. The United States and Japan are the two largest shareholders in the bank. The thorny issue may not be resolved for months or even years, one source said.
In another development at the meetings, Regan took a hard line against moves by India to borrow from the Asian Development Bank. India, which has been hurt by U.S. unwillingness to increase funds for the International Development Association of the World Bank, has said it would like to start borrowing from the Asian Development Bank.