(a) (1) The President shall instruct
the Secretary of the Treasury, the Secretary of State, and other appropriate
Federal officials, and shall request the Chairman of the Board of
Governors of the Federal Reserve System, to use all appropriate means
to encourage countries to formulate economic adjustment programs to
deal with their balance of payment difficulties and external debt
owed to private banks.
(2) Such economic adjustment programs should be designed to safeguard,
to the maximum extent feasible, international economic growth, world
trade, employment, and the long-term solvency of banks, and to minimize
the likelihood of civil disturbances in countries needing economic
adjustment programs.
1-501.21
(b) To ensure
the effectiveness of economic adjustment programs supported by Fund
resources—
(1) the United States
Executive Director of the Fund shall recommend and shall work for
changes in Fund guidelines, policies, and decisions which would —
(A) convert short-term bank debt which was made at high interest
rates into long-term debt at lower rates of interest;
(B) assure that the annual external
debt service, which shall include principal, interest, points, fees,
and other charges required of the country involved, is a manageable and prudent percentage
of the projected annual export earnings of such country; and
(C) provide
that in approving any economic adjustment program the Fund shall take
into account the number of countries applying to the Fund for economic
adjustment programs and the aggregate effects that such programs will
have on international economic growth, world trade, exports and employment
of other member countries, and the long-term solvency of banks; and
(2) except
as provided in subsection (c) of this section, the United States Executive
Director of the Fund shall oppose and vote against providing assistance
from the Fund for any economic adjustment program for a country in
which the annual external debt service exceeds 85 per centum of the
annual export earnings of such country, unless the Secretary of the
Treasury first determines and provides written documentation to the
Committeeon Banking, Housing, and Urban Affairs and the Committee
on Foreign Relations of the Senate and the Committee on Banking, Finance
and Urban Affairs of the House of Representatives that—
(A) the
economic adjustment program converts high interest rate, short-term
bank debt into long-term debt at significantly narrower interest rate
spreads than the average interest rate spreads prevailing on bank
debt reschedulings negotiated between August 1982 and August 1983
for countries receiving assistance from the Fund for economic adjustment
programs in order to minimize the burdens of adjustment on the debtor
nation, provided that such interest rate spreads are consistent with
that nation’s need to obtain adequate external private financing;
(B) the annual external
debt service required of the country involved is a manageable and
prudent percentage of the projected annual export earnings of such
country; and
(C)
the economic adjustment program will not have an adverse impact on
international economic growth, world trade, exports, and employment
of other member countries, and the long-term solvency of banks.
1-501.22
(c) The provisions of subsection
(b)(2) shall not apply in any case in which the Secretary of the Treasury
first determines and provides written documentation to the Committee
on Banking, Housing, and Urban Affairs and the Committee on Foreign
Relations of the Senate and the Committee on Banking, Finance and
Urban Affairs of the House of Representatives that—
(1) an emergency exists in a nation that
has applied to the Fund for assistance that requires an immediate
short-term loan to avoid disrupting orderly financial markets;
(2) a sudden decrease
in export earnings in the country applying to the Fund for assistance
has increased the ratio of annual external debt service to annual
export earnings, to greater than 85 per centum for a period projected
to be no more than one year; or
(3) other extraordinary circumstances exist
which warrant waiving the provisions of subsection (b)(2).
[22 USC 286cc.
As added by act of Nov. 30, 1983 (97 Stat. 1272).]
