The policy-making body of the International Monetary Fund yesterday resisted a broad set of demands for additional aid made by the IMF's poorer members, cautioning against "any premature shift to expansionary monetary and fiscal policies."
In direct refutation of persistent pressure form the block of poor nations to give first priority to stimulation to give first priority to stimulation of economic growth, the IMF's Interim Committee -- the board that makes the key decisions -- said in a communique last night that "the fight against inflation must not be relaxed."
Specifically rejected by the Interim Committee -- meeting in advance of the annual joint session with the World Bank beginning tomorrow -- was a proposal by the poor that would have expanded the world's monetary reserves by an additional $78 billion in 1981.
Yesterday's meeting was chaired by Hannes Androsch, vice chancellor and minister of finance of Austria who replaced Philippo Maria Pandolfi, Intermin Committee chairman and treasury minister for Italy, who had to return to Rome because of the government crisis there.
Representatives of the Third World had presented a series of demands to alleviate what they said was a deteriorating economic outlook. Their list included a call for a supplementary allocation of six billion Special Drawing Rights (SDRs) in 1981.
SDR's, each worth about $1.31, are a paper monetary asset created by the IMF for its 140 members, who share in the money-creation according to their relative economic status. For the three-year period 1979-81, an annual issue of four billion SDR, or about $5.2 billion had been created.
In their own communique issued earlier yesterday the Intergovernmental Group of 24, representing the poor nations, had called for the supplementary six billion issue of SDRs, which would make it 10 billion SDRs in all for 1981, and continuing at that rate for a five-year period beginning in 1982.
Sources said, however, that the poor nations had not pressed this demand very hard, leaving the impression that the request for more SDRs was largely for home consumption. "It was a very tame meeting," a European official said.
Nonetheless, the industrial nations indicated in the Interim Committee communique a sympathy to some boost in the four billion SDR rate beginning in 1982. But this decision in effect was postponed until the next meeting of the Interim Committee, in Libreville, Gabon, in the spring of 1981.
On the other hand, the Interim Committee agreed to a longstanding request of the Group of 24 that the executive board "carry out a more comprehensive story of a possible link between SDR allocations and development finance." The poor nations have insisted not only on larger issues of SDRs, but also argue that their proportional share should be increased.
There was little disagreement among the rich and poor nations that the world economy had taken a turn for the worse in 1981, although the rhetoric of the poor nations was more vivid, and the communique of the Interim Committee noted the "the world economic situation had not changed much since its April meeting in Hamburg."
Nonetheless, the outlook on all sides stressed the problems of high inflation, sluggish economic performance and uncertainly about energy supplies and prices.
The rich nations stressed their willingness to expand and improve the lending and aid functions of the IMF, and outlined in the communique several concrete steps in that direction. But in essence, the response was more cautious than desired by the poor bloc within the IMF.
Androsch said that the group recognized that the role of the IMF must be increased to provide the necessary financing for the less developed countries. He added that the main source for creating new IMF resources should be through the regular process of increasing the quotas -- that is, the deposits -- by the IMF member countries.
Officials explained that next in order of priority would be efforts to borrow money from the richer member nations, notably the oil cartel countries.
The possibility of the IMF borrowing money from the private markets was put last in the order of priority, the communique noting that this was a resource to be taken if it proved to be "indispensable."
Nonetheless, there is growing sentiment among some major countries that the IMF should put itself in the position to borrow directly from the Eurodollar and other money markets, and the Interim Committee authorized a study yesterday of the problems associated with such borrowings.
German Central Bank President Karl Otto Poehl told reporters: "Access to financial markets would dimish the ability of surplus nations to be able to blackmail the IMF in a political sense."
This was a reference to the political flap last week over the question of admission of the Palestine Liberation Organization to the meeting as observers -- temporarily resolved by banning all observer groups -- which at this point is still on the agenda for tomorrow's joint session.
A group of Arab nations, which had been exjected to lend large additional funds to the World Bank as well as to the IMF, has withheld assurance of such aid, which has led the IMF into the whole question of borrowing instead from the money markets.
Meanwhile, the United States, West Germany and the other major industrial nations stood firmly against the Group of 24's demand that the developing world receive more power within the IMF by a boost from 33 to 45 percent in their voting shares. The communique said that "further consideration" was needed before coming to a decision, and it was indicated by IMF Managing Director Jacques de Larosiere that the resolution of the power-sharing problem might be settled in connection with the next review of quotas.
De Larosiere intimated that the Third World countries might gain some increase in their voting power by selective boosts the next line quotas are revamped.