5 OCTOBER MEETING WITH DDCI NIO/ECONOMICS THREATS AGAINST THE UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000100200022-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: May 6, 2010
• Sequence Number: 22
• Content Type: MISC

Approved For Release 2010/05/06: CIA-RDP87T00759R000100200022-1
5 October Meeting with DDCI
NIO/Economics
Threats Against the United States
The annual World Bank/Fund meeting which took place last week on the
whole was even more upbeat than most US officials expected. In
particular, there was greater confidence than last year in the stability
of the US banking system. There was also satisfaction with the
announced tentative agreement between the IMF and Argentina, with
progress toward such an agreement with the Philippines, and with the
successful negotiation of long-term debt rescheduling between Mexico and
the Bank and the prospect of an early similar agreement with Venezuela.
But despite these successes, major problems remain. For example:
o There are signs that Argentina has not yet come up with a
specific economic program acceptable to the IMF for
implementing the overall agreement on objectives. So far at
least the Argentrine government appears to be trying to lower
inflation and meet IMF criteria in an essentially painless
manner. This is almost certainly impossible. Either the
agreement with the IMF will not be finalized or Agentina will
fall out of compliance within three months. It is possible,
however, that Alfonsin will become persuaded that he must bite
the bullet--which will mean some declines in real wages--and
appeal to the country to override opposition from the Peronists.
o Peru, Bolivia, and Chile are facing growing difficulties in
managing the internal economies and debt service obligations.
Chile, hard hit by a combination of falling copper prices and
high interest rates, cannot continue to pull out of its
economic depression and still meet its obligations.
Consequently Pinochet will have few economic carrots to ease
political opposition. In Peru the lame duck government is
trying to avoid a further erosion of its already weak political
position. Bolivia is a basket case.
o In most debtor countries, economic problems are generating
political pressures that are substantially restricting the
flexibility of debtor country governments to undertake economic
reforms and to deal cooperatively with foreign creditors,
including the IMF--a condition which increases the risks of
debtor-creditor confrontations even though some of the
economies will probably improve.
Approved For Release 2010/05/06: CIA-RDP87T00759R000100200022-1