Representatives of small nations yesterday called on the International Monetary Fund to ease the strict terms of their loans, and at the same time make available even more money.
This was a key point in a communique issued after a meeting of the Group of Twenty-Four, chaired by A.G.N. Kazi, governor of the State Bank of Pakistan.
The G-24 session was one of the several preliminaries to the opening tomorrow of the annual joint meeting of the IMF and World Bank (Details, Page M1). The IMF policy group, the Interim Committee, will meet today to discuss the poor nation's proposals, as well as the world economic outlook.
In a routine session, the so-called Group of Ten rich and industrial nations late yesterday elected West German Finance Minister Hans Matthoefer as chairman for the coming year.
More substantive private talks on world growth, the dollar and other monetary problems were held by the finance members of the Group of Five Matthoefer. Treasury Secretary W. Michael Blumenthal, British Chancellor of the Exchequer Denis Healye, French Minister of Economic Rena Monory, and Japanese Finance Minister Tatsuo Murayama.
G-24 Chairman Kazi said that poor nations that borrow from the IMF are willing to accept a certain degree of strictness in terms - called "conditionality" - but insisted that some of the conditions the IMF has been setting are "unacceptable." He made particular reference to conditions affecting the pricing of commodities that some countries consider excessively harsh, or even an interference with their national prerogatives.
Guidelines for loan terms, the communique said, "should be designed so as to limit the performance criteria only to relevant macroeconomic variables."
The G-24 communique supported proposals by Managing Director Jacques de Larosiere for a 50 percent increase in basic IMF resources (quotas) and in a three-year allocation of Special Drawing Rights (SDRs) amounting to 4 billion to 6 billion a year.
SDRs are a special asset created by the IMF and distributed proportionately to members. There has been no new issue since 1973. The United States and other nations are supporting a modest new allocation, primarily to give "credibility" to the SDRs, which are supposed to replace dollars and gold as the main asset and denominator of the international monetary system.
Expectation is that a decision of SDRs issue by the Interim Committee today will focus on the lower end of the range recommended by Larosiere.
The G-24 also:
Urged accelerated economic growth in the industrial world to minimize the dangers of protectionism.
Suggested that the IMF apply tougher surveillance standard to rich countries like Japan and West Germany, so as to minimize currency fluctuations and to stimulate world trade.
Said that the growth goals for poor nations outlined in the World Bank's world development report, published last month, were inadequate to meet the problems.
"The international community (should) make a more determined effort toward the adoption of the main measures leading to the establishment of the New International Economic Order," the communique said.
The "main measures" all relate to substantial transfer of real resources from the rich to the poor, including subsidized loans, as well as development capital at long-term commercial rates.