WASHINGTON: The 10 richest countries in the international monetary fund have turned a deaf ear to Indian finance minister Madhu Dandavate impassioned pleas before the IMF interim committee for a “bold initiative along the lines of the oil facility of 1974” to counter the effects of the Gulf crisis.
The G10, which have a major share the organisation, also rejected the finance minister’s plea for modification of existing facilities like the CCFF (compensatory and contingency financing facility) with an interest rate subsidy, easy access and flexible terms.
Meeting here separately on Sunday, the G10 said in a communique, though they accepted the idea of the requirement for aid, “the affected countries would need to strengthen their adjustment efforts which would provide the necessary basis for international support”.
The only concession they made was in urging the Bretton Woods institutions to “adopt appropriate measures to respond flexibly and in a timely manner”.
IMF managing director Michel Camdessus has himself rejected the idea of separate oil facility and said the existing windows should be adequate, though he accepted the need for more funding.
Where India and other similarly placed developing countries have been rebuffed by the rich countries in no uncertain terms is in their plea for aid without too many conditions.
Aid would be forthcoming, the G10 said, but only if the countries in question put their house in order and “are more active than they have been in the past in their adjustment efforts.”
Article extracted from this publication >> October 5, 1990
