AP NEWS
Related topics

Bush, Perez Meet Amid Debt Talks

April 1, 1989

WASHINGTON (AP) _ President Bush urged the president of Venezuela today to press ahead with his nation’s economic reforms as the administration pushed its new plan to curb social and economic tensions over the Third World debt crisis.

Bush’s White House breakfast session with Carlos Andres Perez, was ″very productive,″ said White House press secretary Marlin Fitzwater.

They were joined in their 1 1/2 -hour meeting by Secretary of State James A. Baker III, Treasury Secretary Nicholas Brady, national security adviser Brent Scowcroft, White House chief of staff John Sununu, Vice President Dan Quayle, National Security Council aide Bob Pastorino and Bernie Aronson, assistant secretary of state-designate.

The group dicussed the debt crisis plaguing Venezuela and other Third World countries and Perez described the economic reforms underway in his coiuntry, said Fitzwater. Bush ″encouraged them to continue with the reform effort,″ he added.

They also talked about the administration’s new plan to aid the Contras in the efforts to bring about peace in Nicaragua.

Bush told Perez that he wants to keep diplomatic pressure on Nicaragua’s ruling Sandinistas to implement democratic reforms, and he asked Perez’s support for that effort, Fitzwater said. The spokesman said he had no further details of the meeting.

The meeting came as the administration was looking to the spring meetings of the International Monetary Fund and the World Bank, starting this weekend here, for approval of its new plan to help Third World nations ease their crushing $1.3 trillion debt burden.

Perez has come to Washington for the sessions, which are attended by the finance ministers and other influential officials of the twin international lending organizations’ 151 member nations.

In the 7-year-old crisis, the burden of paying interest on $1.3 trillion that developing nations owe has sapped their economies, lowered living standards and led to growing political and economic unrest.

Perez, Venezuela’s new president, blamed riots in his country last month that claimed 270 lives on ″intolerable and obscene″ debt repayment terms imposed by creditors. He called on wealthier nations to do more to relieve the debt burden.

Critics have complained that the administration plan - named for Brady - has raised unreasonable expectations for debt relief in Latin America and may end up fomenting political instability instead of helping relieve tensions.

A senior Treasury official who asked not to be named said the administration saw Perez as vital to selling the debt-reduction process.

″He views himself as a leader in Latin America,″ the official said. ″Here is a president with the blood of nearly 300 people to deal with, and he’s pretty courageous to stand by his economic reforms.″

A second Treasury official said, ″If we get support on the debt program from Perez ... I think it will be a success.″

Preliminary discussions began on Friday with a meeting of finance officials representing debtor countries. On Sunday, Brady is hosting daylong discussions with the finance ministers and central bank presidents of the world’s largest industrial countries. The U.S. debt plan is expected to be the principal topic on the agenda.

These talks, involving the United States, Japan, West Germany, Britain, France, Canada and Italy, will take place at River Farm, an estate along the Potomac River which once belonged to George Washington.

The administration is looking for an endorsement of the new strategy so that the major creditor countries will present a united front when the Brady plan is taken up at the Monday and Tuesday sessions of the IMF and World Bank.

Under the Brady plan, commercial banks would be asked to forgive voluntarily a portion of the loans they have made to poor nations. In return, the IMF and World Bank would provide assurances that the remaining debt would be repaid.

The administration has estimated that over the next three years its proposals could result in wiping out about $70 billion of the $340 billion in debt owed by 39 developing nations, a group which includes all of the largest debtors and many of the smaller ones.

The IMF and World Bank would be expected to contribute about $12 billion each over three years to spur the debt reduction effort. The United States is also looking to Japan, and other countries which are running large trade surpluses, to recycle some of that money into debt relief. Japan is expected to contribute between $5 billion and $10 billion.

AP RADIO
Update hourly