SUNS  4304 Monday 19 October 1998


UNITED STATES: IMF WINS, UN LOSES IN CLINTON-CONGRESS DEAL

Washington, Oct 15 (IPS/Jim Lobe) -- U.S. President Bill Clinton and the Republican-led Congress finally agreed on a $500 billion budget Thursday that included $18 billion dollars for the International Monetary Fund (IMF) but nothing of the billion dollars arrears that Washington owes the United Nations.

The bill, negotiated over several days, also included legislation authorising the implementation of the 1993 Chemical Weapons Convention (CWC) that was ratified by the Senate last year. It also
approved $35 million for heating oil for North Korea, Washington's part of a controversial accord to ensure Pyongyang does not develop nuclear weapons.

The bill authorised a major re-organisation of the State Department, long sought by Senate Foreign Relations Committee Chairman Jesse Helms. The U.S. Agency for International Development
(USAID), the U.S. Information Agency (USIA), and the Arms Control and Disarmament Agency (ACDA) - all quasi-independent bureaucracies - will be fully integrated under the State Department.

Final details of the bill, including the total amount of foreign aid authorised for 1999, were not officially released but details were expected over the next few days.

"We haven't seen a copy of the bill yet" was a common refrain late Thursday as lobbyists and mid-level officials scrambled to find out exactly what had been cut and what had been included in
negotiations between out-going White House Chief of Staff Erskine Bowles and the Republican Congressional leadership.

Both sides claimed victory for their top priorities in the bill, an omnibus measure that includes funding for everything from agriculture and education to abortion and the global environment.

Clinton got his top foreign global economic priority of 18 billion dollars for the IMF which he said was needed to contain the 15-month-old financial crisis which has devastated emerging markets
in East Asia and Russia and has spurred capital flight from Latin America. Of the total, about 3.5 billion dollars represents Washington's contribution to a new contingency fund; the rest is to be used by the cash-strapped agency as part of a 45% increase in its lending resources.

Republicans and some Democratic sceptics of the international agency, however, succeeded in attaching conditions to the IMF appropriation that, with the support of other industrialised nations, will require the IMF to raise interest rates for most of the loans it approves, shorten payback periods, and publish the minutes of its executive board meetings.

"Now we are free here in this administration to keep our economy going by meeting our responsibilities to deal with the global economic challenges," Clinton said after the agreement was reached.

But if the administration succeeded in getting the money it wanted for the IMF, it failed to get even one penny of the UN arrears. Informed sources told IPS that two efforts to get at least $200
million in arrears included in the bill fell apart as a result of the Republicans' insistence that Clinton ban aid to overseas groups that urge their governments to ease anti-abortion laws.

U.S. officials, who earlier had said the failure to pay any arrears could result in Washington losing its vote in the UN General Assembly, told IPS that they can use the more than $900 million
Congress approved for the United Nations and its specialised agencies for 1999, to remain in good standing.

Under Article 19 of the UN Charter, member states lose their votes if their arrears exceed assessments for two preceding years.

"We will get around that," said one official who added that the Republican leadership in Congress had committed itself to approve reprogramming and other procedures that would be necessary to avoid the Article 19 sanction.

Still, the failure to approve any arrears marked a significant setback for the United Nations which has been forced to adopt severe austerity measures to keep financially afloat in major part
due to Washington's deadbeat status. Altogether, the United States owes the world body more than 1.5 billion dollars.

The sticking point in the negotiations proved to be right-wing Republican pressure in favour of the so-called 'Mexico City' policy which banned U.S. aid from going to any international family-planning groups overseas which lobbied their governments to ease anti-abortion laws. Pressed by women's and aid groups which strongly oppose what they refer to as a "global gag rule," Clinton has vowed to veto any legislation that includes the ban.

Last year, the leader of the Republican anti-abortion forces in the House of Representatives, Rep. Chris Smith, extracted a pledge from House Speaker Newt Gingrich that the Mexico City provision would be attached to both the UN arrears and the IMF appropriation requested by Clinton.

But Gingrich, who has been under strong pressure from big corporations which fund Republican candidates to fund the IMF, pried loose from that commitment on the $18 billion for the global
agency. When reports circulated Wednesday that he had capitulated to Clinton on the U.N. arrears issue as well, Smith intervened directly.

"Gingrich was not willing to cut Smith off all the way," said one knowledgeable lobbyist. "He defied him on the IMF, but wouldn't do the same for the U.N.," he added.

As for the administration, the same source said "it was clear that the United nations was less of a priority than the IMF" and other issues, such as the Chemical Weapons Convention and a number of ambassadorial appointments which have been backed up by Helms to put pressure on Clinton to go along with the Mexico City language and other right-wing initiatives.

U.N. advocates in Congress are now very concerned about prospects for getting the arrears paid next year. With Republicans poised to make gains in both houses of Congress and with Clinton weakened both by scandal and his lame-duck status, "it will be much, much harder to get the arrears paid," said one State Department official.

Clinton could still decide to sign a bill passed by both Houses of Congress earlier this year which provides a total of $926 million for U.N. arrears. But this bill includes the Mexico City restrictions which Clinton vowed to veto.

Gingrich said Thursday "we went from Mexico City to Tijuana in terms of trying to compromise, we hope that he (Clinton) will accept that compromise and sign the bill to get the money to the United Nations.