According to a SELA report IMF
funding pose new test of U.S. internationalism
Caracas, March 9. The Latin American Economic System (SELA) warned that U.S. debate on the replenishment of International Monetary Fund (IMF) resources will be yet another test to measure the scope and responsibilities of the Executive and Legislative branch in promoting global economic cooperation.
The first battle over this issue was won by President Bill Clinton, who obtained the approval, from the House Financial and Banking Services Committee for the bill he introduced to increase U.S. contribution to the IMF by 18 billion dollars.
Although the voting in the Committee resulted in 40 ayes and only 9 nays, the debate is not over yet. Within the next two weeks, the bill will be discussed by the House and Senate Budget Committee before being put to vote by Congress.
The positions of U.S. congress members and Clinton’s attempt to increase the U.S. contribution to the IMF are analyzed in the March edition of the SELA Antenna in the United States, which SELA, regional organization whose headquarters are in Caracas, started disseminating today among its 27 Member States.
According to SELA, the future course for U.S. internationalism is at stake. Albeit for different reasons, "the left and right wings of the American political spectrum are working in concert to undermine internationalism." "The political center still supports open markets and an active world role, but the size of that center appears to have shrunk markedly in recent years."
The Bulletin goes on to point out that the left views economic globalism as "a conspiracy by multinational corporations to exploit workers in both industrialized and developing countries" while the right sees international organizations and economic agreements as "threats to U.S. sovereignty."
The SELA bulletin clarifies a bit more by stating: "The economic troubles in Asia provide the field on which the latest battle is being fought." The solution found to the tiger and dragon crisis could also mean "renewed protectionist measures in the United States as well as changes in what U.S. officials term the ‘architecture’ of the global financial system."
Another aspect that should not be taken too lightly is the scenario in which this Asian crisis is set. Recent data confirms that the U.S. trade deficit continues to grow. SELA does well in reminding that the "overall U.S. merchandise deficit has risen during each year of the Clinton Presidency" and that according to estimates it could well reach 300 billion dollars in 1998.
The countries of Asia, especially China and Japan, were almost uniquely responsible for the rising U.S. deficit. The deficit could continue to grow if the recession and devaluation in the Pacific continue to spur a dual movement: U.S. exports to Asia are dropping while imports from the Asian region are on the rise.
SELA considers that the U.S. political center, embodied in the Clinton Administration and moderates in Congress, feels that the Asian crisis poses a threat to global prosperity and regional political stability, and this is why it proposes a series of economic rescue measures and reforms in which the IMF plays a key role.
Clinton’s request for congressional approval to increase U.S. contribution to the IMF by $18 billion increase must be seen from this perspective. Of said amount, $3.5 billion would be for a fund for financial crises and the $14.5 billion, to strengthen the U.S. contribution to that institution.
Some members of Congress with close ties to labor unions do not agree with increasing the contribution to the IMF because they feel the IMF has played a part in worsening conditions for workers. This needs to be coupled with the opposition from the ecology groups that pressure the IMF to persuade countries to implement more adequate environmental measures.
There are two types of opposition from the right. The smaller group would like to see the U.S. withdraw altogether from the IMF and other similar international organizations. According to SELA: "Other conservatives adopt a less radical stance, based more on economic beliefs than on political notions of sovereignty."
These groups are skeptical about providing aid. They feel that by having helped in the rescue of Latin American countries earlier simply served as a catalyst for the reckless behavior followed by the Asian countries. To bail them out today could simply mean triggering another similar crisis elsewhere.
The House Banking Committee that approved the bill is "friendly ground" for the Clinton proposal but SELA’s view is that "thereafter it may face much tougher going."
The entire text is available at http://sela.org (Novedades Section).
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