Office of the Historian

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

Washington, April 28, 1983, 4:30 p.m.

ATTENDEES (U)

  • Treasury

    • Secretary Regan
    • Beryl Sprinkel
    • Marc Leland

  • Office of Vice President

    • Admiral Daniel Murphy
    • G. Philip Hughes

  • State

    • W. Allen Wallis
    • Richard McCormack

  • Defense

    • Paul Thayer
    • James Blaker

  • Agriculture

    • Secretary Block

  • Commerce

    • Secretary Baldrige
    • William Archey

  • Energy

    • Martha Hesse
    • William J. Silvey

  • Transportation

    • Secretary Dole
    • Admiral Shear

  • Interior

    • Secretary Watt

  • CEA

    • William Niskanen

  • USTR

    • Michael B. Smith
    • John Ray

  • OPD

    • Edwin Harper
    • Roger Porter

  • OMB

    • Alton Keel

  • CIA

    • Henry Rowen
    • Maurice Ernst

  • NSC

    • Roger Robinson
    • William Martin

International Debt (U)

The Chairman opened the meeting by saying that there would be two items on the day’s agenda: an update on the debt situation in a number of countries and the question of Alaskan oil exports. He asked Under Secretary Sprinkel to give an update on the debt situation and indication that the overall situation still remains difficult, but it is being managed. Some highlights of his presentation included: (C)

Argentina. We are trying to assist in an effort to find a solution to the problem of blocked payments of profits and dividends to U.K. firms, but we are not optimistic about a solution. GOA officials have advised us that they have finally received the draft loan agreement [Page 364] from the commercial banks for the $1.5 billion syndicated loan originally planned for completion by the end of March. (C)

Brazil. Brazil’s cash flow situation will continue to deteriorate through July or August before improving later in the year. They have once again sought our financial assistance, but we believe that official support at this time would undercut efforts to restore financing from commercial banks. We are in close contact and will continue to monitor the situation. (C)

Chile. We hope that Chile will be back in compliance with its IMF stand-by program by the end of September, due to the emergency economic program announced in late March. These talks with the 12-bank advisory committee are well advanced. Chile and the BIS are currently discussing the possibility of a $300 million arrangement. (C)

Mexico. Secretaries Shultz, Regan and Baldrige held a series of meetings with key members of the Mexican economic team while in Mexico on April 18 and 19. We are encouraged by the talks and plan to continue working with our Mexican counterparts to encourage change in economic policy which we believe to be in their interest. The Mexicans said they needed no additional official assistance at this time and do not expect to need any unless there is a sharp drop in oil prices. They mentioned to us their interest in a rescheduling of official direct and guaranteed credits to the private Mexican sector. We are discussing this informally with USG agencies and other creditor countries. (C)

Venezuela. Venezuela will probably use its SDR holdings and IMF reserve tranche shortly. Finance Minister Sosa told us that the GOV would like to arrange an IMF stand-by for end-1983 or early 1984. It appears that banks have continuing concerns about the GOV’s numbers for the size of total external debt and Venezuela’s medium-term economic prospects. The GOV is working to address these concerns. (C)

Peru. Finance Minister Rodriguez-Pastor will be in Washington on April 28 and 29 for the Development Committee and will meet with Treasury officials. Peru may request a Paris Club rescheduling in the near future. (C)

Nigeria. Nigeria is being forced to negotiate with the IMF by its inability to obtain sufficient funds from other creditors in the absence of a Fund agreement. Finance Minister Masi is here for the Development Committee and will indicate to the Fund whether or not serious negotiations can begin. The SIG–IEP working group that was established in response to Under Secretary Wallis’ presentation on the need for financial support from the U.S. Government has met and will be preparing some options for consideration by the SIG in the next several weeks. (C)

[Omitted here is discussion of the Alaskan oil exports.]

  1. Source: Reagan Library, Roger Robinson Files, Subject File, SIG–IEP Meetings 05/13/1983–06/30/1983; NLR–487–7–l–2–1. Confidential. Sent under a May 13 covering memorandum from Pickford to multiple recipients. The meeting took place at the Department of the Treasury.↩