The United States yesterday vetoed a $20 million low-interest loan to Guyana from the Inter-American Development Bank --the first time a loan by a multilateral development agency has been rejected when brought to a vote.
The action was symbolic of a hard Reagan administration line against what it considers a trend toward loose lending policies by the multilateral banks, or loans that work against the interest of private companies.
Rice producers in the South American country, a former British colony, would have been the principal beneficiaries of the loan. American officials said their objections were based on "technical grounds," that is, on the lack of sufficient economic justification. They said the veto had no political overtones.
The basic U.S. objection was to the Guyanese government's pricing regulations, which in effect subsidize the cost of rice to consumers. The United States regards this as a disincentive for farmers.
Guyana has a left-wing government, and in the past the United States has expressed displeasure over what it considers the close relationship between Prime Minister Forbes Burnham and Cuban President Fidel Castro. The Guyanese economy, heavily dependent on sugar and rice exports, has been in critical shape for some time.
Deputy Treasury Secretary Tim McNamar said that "in past years we might have gone along with loans of this kind, but unless we find them based on sound economics, we just won't support every loan proposal that comes up."
He added that the United States hopes to induce all the multilateral agencies, including the World Bank and regional development banks, to tighten the conditions of their loans. McNamar indicated that these banks should rely more on co-financing -- that is, in conjunction with private lenders -- and on loans by the private sector alone.
The IADB's loan was to have been made by its Fund for Special Operations, the soft-loan or concessional aid window of the agency. These loans, typically carrying an administrative fee of 2 to 3 percent, require approval of two-thirds of the membership. Since the United States votes 34.5 percent of the shares, its negative vote automatically constituted a veto. Sources said last night that one other nation, which could not be identified, abstained.
Sources said that the United States had indicated by letter on Aug. 7 and orally four days later that it would not vote in favor of the loan to Guyana. Historically in such a circumstance the proposal is not brought to a vote. But the IADB management, after making one concession, decided to put it to a vote and was defeated.
The concession conditioned one part of the loan on a study of the pricing and subsidy practices of the Guyanese government. American officials said that such a study should be completed before any part of the loan was made.
"The terms weren't strict enough," McNamar said. "This was a loan broadly for the agricultural sector, not a project loan where you can audit what is going on. We are not keen on sectoral loans."