Third World countries will try to force a showdown with the world's major industrial nations this fall over the international debt and other monetary problems.
International development officials said yesterday that the "Group of 24" developing countries, frustrated by past attempts to win a hearing on the debt problems with the United States and other industrial nations, will try to use the procedures of the International Monetary Fund to force the showdown when the IMF's Interim Committee meets in Seoul in October.
The developing nations currently are drafting a formal paper to be presented to the Interim Committee. Under IMF rules, such formal documents must be put on the agenda for debate. In the past, according to development officials, the Group of 24 only has issued informal communique's, which could be ignored under IMF rules.
The Group of 24 paper is expected to be approved in a meeting in Washington on Aug. 19 and 20. The paper is likely to include proposals for coordinating exchange rate policies, improving liquidity of poor countries, easing the international debt situation and maintaining foreign aid.
The paper is supposed to parallel one prepared by the industrial nations that make up the "Group of 10." That paper also will be discussed before the Interim Committee. The G-10 report, which has already been prepared, argues that the use of floating exchange rates in the international monetary system remains valid and requires no change.
The G-10 report also rejects the expansion of international liquidity through the creation of Special Drawing Rights (SDRs), the IMF's international paper currency. The IMF should provide more candid assessments of the policies of all nations, whether rich or poor, with a better system for following up on how nations respond to the advice, the G-10 paper says.
The G-10 report also sets out a complicated procedure to bring peer pressure on nations that may be damaging the economic health of others, and to determine how the domestic policies of the G-10 countries affect international exchange rates.
In its report, the G-24 is expected to say that the world has not yet emerged from the deep crisis of the early 1980s, despite spurts of recovery, and that the floating exchange rate system hasn't quite worked. The report will not recommend returning to fixed exchange rates, but probably will urge that policies of different countries be coordinated to prevent exchange rate misalignment and improve stability.
An international agency should be able to intervene in exchange markets when exchange rates exceed a certain level, the G-24 says in its draft report.
The G-10 paper also will differ from the industrial nations' paper on the subject of SDRs. The poorer countries are expected to ask for the creation of more SDRs and, generally, improved liquidity for developing countries.
The international debt crisis has cooled for the moment, but the problem of financing debt and the ability of poorer nations to get new lending still persists, the G-24 paper is expected to say. New credit should be available to those countries that need it most and should be tied to efforts to help the poorer economies grow, the report is expected to say.
A development official said that, over the next two to three years, between $45 billion and $50 billion in financing will be necessary for poorer countries.
The G-24 paper also is expected to say that developed countries -- not just Third World debtors -- should be subject to surveillance by international bodies because their activities can affect other countries and the stability of the international monetary system. Pressure should be placed on countries that do not correct their harmful policies, the report is expected to recommend.