Dutch Finance Minister H. Onno Ruding, chairman of the Group of Ten industrial nations, complained yesterday that his group, rather than the more exclusive Group of Five, should manage international economic policy.
Ruding's complaint about the G-5 -- made up of the finance ministers and central bankers of the United States, Japan, West Germany, England, and France reflects a long-standing rivalry between these major nations on the one hand, and the G-10, which includes as well Italy, Canada, Belgium, the Netherlands, Sweden, and Switzerland (an actual total of 11).
He said he would seek a bigger role for the G-10 in discussions of exchange rates and related issues at a special half-day meeting prior to the meeting of the International Monetary Fund's policy board, the Interim Committee -- which he also chairs -- in Washington on April 9.
After meetings here yesterday with Treasury Secretary James A. Baker III, Federal Reserve Board Chairman Paul A. Volcker and World Bank and IMF officials, Ruding told reporters that a G-5 meeting scheduled for London on Saturday was not likely to take new actions to push the dollar down further.
At a highly publicized meeting in New York on Sept. 22, the G-5 nations agreed to embark on a coordinated intervention policy designed to bring the dollar down and push other currencies up. In the process -- which has been successful so far -- some of the central banks of G-10 members who are not in the G-5 were called upon to participate in the intervention.
These other G-10 central banks, according to a New York Federal Reserve Bank report, sold more than $2 billion out of the $10 billion worth of intervention against the dollar immediately following the September G-5 meeting.
More pressure on the dollar, Ruding told reporters, would not now be welcomed in Europe because "it might increase fears of a hard landing for the dollar," setting off "panic reactions." Ruding also said that he would welcome, in principle, an agreement advocated by Japan to lower interest rates through a coordinated central bank effort, but doubted that it was feasible.
He praised Baker's Third World debt initiative calling for a 50 percent increase in lending by the multilateral lending banks, along with a $20 billion boost in commercial bank loans over the next three years.
But the Dutch official plans to tell the National Press Club at a breakfast this morning that the initiative "cannot succeed without United States support for a General Capital Increase GCI of the World Bank." U.S. approval, he revealed to Dutch correspondents yesterday, is likely to be forthcoming at the end of 1986.
He explained to the Dutch journalists that the United States did not want to propose a GCI at the same time that its new federal budget calls for a contribution to the bank's International Development Association activities (IDA-8).
On the issue of the G-5 versus the G-10, Ruding argued that the smaller industrial nations are increasingly active in international financial arrangements, and therefore deserve greater recognition. Without naming them directly, he also implied that England and France -- members of the G-5 -- would prefer to see major decisions made in a G-10 framework.
Those industrial nations left out of the G-5 resent the power exercised by the smaller group over the world economy. The United States, West Germany, and Japan -- in effect a Big Three within the G-5 -- argue that it is difficult to make decisions in the larger group. As recently as last June, the G-10 nations at a special meeting in Tokyo adopted a report that totally opposed coordinated intervention as a tool to bring exchange rates into better balance, a decision that in effect was reversed four months later by the G-5.
In remarks prepared for his Press Club appearance this morning and made available to The Washington Post last night , Ruding said that to deal with the Third World debt crisis, the industrial countries have "a double task" -- to provide money both on a bilateral and multilateral basis to the poor countries, and to pursue adequate policies themselves.