The International Monetary Fund's policy-making board, dominated by the richer industrial countries, yesterday warned Third World nations that they must make "strong and comprehensive" adjustments to their economies rather than borrow to cover all their needs.
The board, known as the Interim Committee, declared after a two-day meeting that this action was necessary to reduce the poor countries' "unsustainable" deficits in the trade of goods and services. It estimated the total deficit at $83 billion for 1980.
It was the first time the Interim Committee had used the phrase "unsustainable" to describe these deficits, the implication being that they had to be cut back, rather than covered by more and easier loans.
The Interim Committee meeting was a prelude to the annual session of the World Bank and IMF that starts here tomorrow with a brief word of welcome from President Reagan.
Meanwhile, Treasury Secretary Donald T. Regan said that the United States is now satisfied with the degree of strictness in IMF loan terms, but warned the agency not to slide back into the laxity he said it had shown earlier.
Regan's comments to reporters after the Interim Committee's statement yesterday were less harsh than last Monday when he called for "greater conditionality" on the part of the IMF. Last week, he also called for major changes in the World Bank approach, but that question did not come up yesterday.
Regan told reporters yesterday that the IMF "in the last several months had been following a very strict policy." He added he was not asking the IMF to do "any different from what you're doing now. We're saying, 'You're off on a good course, and stick to it.' "
IMF Managing Director Jacques de Larosiere defended the fund's loan guidelines at a separate press conference. He said that "although it is true that there are programs that do not work in a perfect way," the fund's approach on the whole had been successful.
Yesterday Regan said that the world powers had "eased aid conditions a bit" in the wake of the first oil shock in the mid-1970s, in order to help poor nations meet their deficits. "More recently, the conditions have changed, we've absorbed a second oil shock, and people are starting to say, as we are in the United States, 'Let's get back to basics,' where we have to get our balance of payments and exchange rates in line," the Treasury boss said.
Regan briskly denied the suggestion that the United States had been rebuffed by a strong endorsement of IMF policies contained in the Interim Committee statement, and in personal comments by the committee chairman, Allan MacEachen, deputy prime minister of Canada. The stern language of the communique could have been drawn "by a combination of Federal Reserve Board Chairman Paul A. Volcker and Treasury Undersecretary Beryl Sprinkel," Regan said.
On the other hand, a top IMF official said privately that Regan in fact had shifted his stance since last week, observing that "the secretary was badly briefed. We had been doing all along what he said he wanted us to start doing."
Nonetheless, the Interim Committee's language explaining the need for "strong and comprehensive adjustment policies" by the developing nations clearly was stronger than in the past.
In addition, the committee's statement:
* Said that fighting inflation must still get "a clear priority" so as to reduce interest rates and achieve better rates of economic growth and employment.
* Left open the prospect that the IMF might next year continue to issue its special credit, known as Special Drawing Rights, despite American opposition. A proposal to continue the present annual creation of 4 billion SDRs ($4.5 billion), which is scheduled to expire at year's end, would be a compromise between the U.S. stand and the poor nations' demand for an issue of 12 billion SDRs ($13.5 billion).
* Emphasized, in response to complaints that it directs all its attention to countries with deficits and weak currencies, that its "surveillance role" has to be applied in a "symmetrical" manner. That means that it will also ask questions of countries that appear to be running excessive balance of payments surpluses.
* Kept alive the possibility that the IMF might borrow from the commercial market, but agreed that the basic expansion of the fund's resources must come from the members' deposits, known as quotas. It was agreed to expedite the next review of quotas, which comes into effect after 1983. At that time, it is likely that Japan and West Germany will get larger quotas and England smaller, reflecting changes in the world economy. Whether the United States also will take a smaller share is yet an open question.