Peru today reiterated its threat to withdraw from the International Monetary Fund and called for a special U.N. conference to revamp the world monetary order.
Peruvian Prime Minister Luis Alva Castro, addressing the annual joint meeting of the IMF and World Bank here, said austerity policies the IMF has imposed in heavily indebted countries had only "deepened recession and threatened democracy."
"The countries of the Third World are condemned to hunger in the name of economic balance," Alva said, according to an unofficial translation of a speech that repeatedly attacked the United States.
The IMF, the international financial rescue agency, provides loans to countries that cannot pay their international bills but requires borrowers to take steps to make themselves creditworthy. Generally those involve measures such as stiff reductions in government spending, devaluations and tighter monetary policies.
Among the Latin debtor countries, Peru has emerged as one of the most radical in the fight against controls the IMF requires in return for loans. Recently its president, Alan Garcia, said Peru would limit debt payments to 10 percent of export earnings.
Garcia also has said Peru might leave the IMF, leading to speculation that Alva would announce such a move. But he only repeated Garcia's earlier statement and said the IMF served only to concentrate capital in the United States.
World Bank officials on hand cited early signs that protectionist measures adopted by the United States and other industrial countries are beginning to choke off the export flow from the Third World.