Office of the Historian

129. Minutes of a Senior Interdepartmental Group–International Economic Policy Meeting1

Washington, February 22, 1983, 3 p.m.

ATTENDEES

  • Treasury

    • Secretary Regan
    • Marc Leland

  • State

    • Secretary Shultz
    • W. Allen Wallis

  • Defense

    • Secretary Weinberger
    • Richard Perle

  • Agriculture

    • Secretary Block
    • Richard Lyng

  • Commerce

    • Secretary Baldrige
    • Lionel Olmer
    • Lawrence Brady

  • Office of the Vice President

    • Admiral Daniel Murphy
    • G. Philip Hughes

  • Justice

    • Michael Shepparel
    • America Cinquerana

  • OMB

    • Joseph Wright

  • USTR

    • William Brock
    • David Macdonald
    • John Ray

  • CIA

    • Henry Rowen
    • Maurice Ernst

  • OPD

    • Edwin L. Harper
    • Roger Porter

  • CEA

    • William Niskanen
    • Paul Krugman

  • NSC

    • Roger Robinson
    • Norman Bailey, Executive Secretary
    • Arthur Manfredi

[Omitted here is discussion of the Export Administration Act and agricultural issues.]

[Page 335]

Debt Strategy

Secretary Regan provided a brief summary of the issue of the IMF quota increase and the LDC debt situation.

IMF. A 47 percent increase in resources has been approved, the U.S. portion of which is $5.8 billion. The GAB arrangement will be increased to $19 billion and the availability of this facility extended from just the G–10 to all member countries. The U.S. portion of this increase is $2.6 billion. Secretary Regan stated that we will ask Congress for a total of $8.4 billion and reiterated that there is no budgetary impact. He noted that the increased resources will be used for interest-bearing loans, and we will receive increased drawing rights at the IMF commensurate with our new contribution.

Secretary Regan predicted a tough fight in Congress and requested that everyone assist in this effort. We must respond to charges that these funds should be used for domestic employment and other needs with persuasive arguments concerning preserving international monetary and economic order as well as the international trading system. In support of these arguments are the facts that no country has defaulted on IMF loans since its inception 40 years ago, although some have required successive programs, and that we have drawn down on IMF resources (although never borrowed).

Debt Situation. Secretary Regan said Treasury hoped to wrap up Mexico this week and Brazil is still confronting serious difficulties. Brazil remains about $0.5 billion short on the fourth part of its four point financial package (Interbank deposits), but they are reasonably current on their bills. Secretary Baldrige recommended coordination of all the SIG–IEP efforts in this area. He said if more personnel were needed, they should be provided. His concern was that Treasury and Commerce were separately writing position papers on the debt situation and the impact of the Third World austerity programs on the international trading system. He suggested that an effort be made to approximate the impact of the Third World debt problems on U.S. employment [which] could be a useful issue for the group to study and would assist our efforts to have Congress approve the IMF quota increase. Secretary Regan committed to look into this suggestion.

  1. Source: Reagan Library, Roger Robinson Files, Subject File, SIG–IEP Meetings 02/25/1983–03/07/1983; NLR–487–6–38–6–8. Confidential. The meeting took place in the Roosevelt Room at the White House. No drafting information appears on the minutes. Attachments related to the omitted portion of the minutes are attached but not printed.↩