US TREASURY INITIATIVE ON LDC DEBT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000100130018-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: July 12, 2010
• Sequence Number: 18
• Publication Date: October 3, 1985
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4
SECRET
The Director of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
NIC 04950-85
3 October 1985
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
Acting National Intelligence Officer for Economics
SUBJECT: US Treasury Initiative on LDC Debt
1. In reponse to your request, Secretary Baker arranged for me to
meet with Jim Conrow, Treasury Deputy Assistant Secretary for Developing
Nations, to receive a briefing on the debt initiative to be presented by
the United States at the IMF/IBRD annual meetinas next in South
Korea. David Low, also
attended the sess
2. The key elements of the package include:
A commitment by the industrial countries to keep import markets
open, spur economic growth, and work to resolve internal
problems such as the US budget deficit.
A pledge by Western banks to provide $15-20 billion in "new"
money over the next three years. (Baker and Volcker have
already discussed this with some major lenders.)
An increased role for the IBRD relative to the IMF in lending
and monitoring of LDC performance, including greater emphasis on
moves toward private sector reform and less stringent, more
realistic "macro" targets by the IMF.
A new IMF facility using about $3 billion in funds being repaid
to the IMF from gold sales in the mid-1970s to be redirected to
low income countries, mainly in Africa.
Greater authority for the IADB to increase lending overall and
to channel a greater percentage of lending to the "group A"
(large) countries.
CL BY SIGNER
DECL OADR
Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4
 Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4
SECRET
SUBJECT: US Treasury Initiative on LDC Debt
Overall, the new program will be billed as "pro growth" for the LDCs
leading to improvements in future performance.
3. In return for the promise of new funds, the LDCs will be asked to
take new, as yet unspecified, measures on economic reform and private
sector development. Presumably Treasury will work jointly with the IMF
and IBRD to fashion the new programs.
4. Treasury officials see Mexico as the first test case for the new
system. Mexico City will need new external funds within about six
months, is currently substantially out of compliance with the IMF, and
nas virtually stopped its efforts at economic reform.
Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4
 Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4
SECRET
SUBJECT: US Treasury Initiative on LDC Debt
Acting NIO/Econ) 13 October 1985 NIC 04950-85
Distribution:
Original - Addressees
1 - DDCI
1 - Executive Secretary
1 - Executive Registry
1 - C/NIC
1 - VC/NIC
1 - NIO/LA
1 - NIO/EA
1 - D/OGI
1 - Acting NIO/Econ
1 - A/NIO/Econ
2 - NIO/Econ Files
Sanitized Copy Approved for Release 2010/07/12 : CIA-RDP87T00759R000100130018-4