SENIOR INTERDEPARTMENTAL GROUP-INTERNATIONAL ECONOMIC POLICY APRIL 14, 1983 5:00 P.M. ROOSEVELT ROOM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R000400580008-0
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: November 22, 2010
• Sequence Number: 8
• Publication Date: April 14, 1983
• Content Type: REPORT

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SENIOR INTERDEPARTMENTAL GROUP-INTERNATIONAL ECONOMIC POLICY
April 14, 1983
5:00 p.m.
Roosevelt Room
Treasury
Secretary Regan
Beryl Sprinkel
Marc Leland
Office of Vice President
Admiral Daniel Murphy
G. Philip Hughes
State
W. Allen Wallis
Defense
Donald Goldstein
CIA
Henry Rowen
OMB
Joseph Wright
Alton Keel
USTR
Ambassador Brock
Dennis Whitfield
CEA
Martin Feldstein
Paul Krugman
Agriculture
Richard Lyng
Commerce
Lionel Olmer
Olin Wethington
OPD
Roger Porter
Les Denend
NSC
Norman Bailey, Executive Secretary
Roger Robinson
William Martin
The Chairman opened the meeting by saying that only one of
the two agenda items would be covered. Secretary Shultz wanted
to be present for the long-term grain agreement and was unable
to participate in today's meeting. (C)
The Chairman then asked Under Secretary Sprinkel to update
the debt situation in Brazil, Argentina, Mexico, Venezuela,
Nigeria, Yugoslavia and Poland. Sprinkel summarized the overall
situation as a difficult problem, but one which was being
managed. Some of the highlights of his presentation included: (C)
Mexico: On March 3, the GOM and over 500 commercial banks
signed a $5 billion loan for Mexico. Now the GOM has turned
their attention to $20 billion of debt restructuring.
Secretaries Shultz, Regan and Baldrige will be in Mexico on
April 18 and 19 for a meeting of the U.S.-Mexico Binational
Commission. (C)
Declassify on: OADR
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Brazil: Brazil received the first $2.5 billion disbursement
from commercial banks and its initial disbursements from the.
IMF in March and has repaid all outstanding swaps to the U.S.
Treasury as well as the first installment on its BIS loan.
Brazil's major problem appears to be a failure of needed
private capital ref lows to materialize on schedule. Brazil
is implementing its IMF-backed stabilization program. (C)
Venezuela: The GOV has deferred until July payment of
principal on financial and nonfinancial public sector short-
and medium-term external debt. Foreign reserves have continued
to dwindle, adding greater urgency to successful negotiations
with banks -- negotiations which are likely to be arduous.
Article IV consultations with the IMF appear to have been
completed. (C)
Chile: Treasury has advised the Chileans that the Exchange
Stabilization Fund credit is not possible at this time as
discussed at a recent SIG meeting. The GOC announced an
emergency economic program on March 22. Negotiations with
private banks are under way, but since the Chileans are
having problems in complying with the IMF program, the
outcome is uncertain. (C)
Peru: Treasury also advised Peru that ESF credit is not
possible at this time. The GOP's talks with commercial banks
appear to be proceeding well. (C)
Argentina: The GOA is in serious danger of being out of
compliance with its IMF program by mid year. This could
jeopardize its negotiations for a $1.5 billion loan agreement
with commercial banks. (C)
Yugoslavia: Yugoslavia ended last year with an immediate cash
flow program and large current account deficit. Over the past
months, a five-part program has been assembled including:
assistance from commercial banks, an IMF standby program, BIS
short-term credits, credits from governments, and an IBRD
structural adjustment loan. (C)
Poland: Credits from the West and talks on-rescheduling 1982
debts were terminated with the imposition of martial law in
1981. As a result, in 1982, Poland's economic activity
continued to decline, and 1983 is not foreseen to improve the
situation. Commercial banks rescheduled the Poles 1982 debt
late in the year -- leaving little for other creditors.
Others want to reschedule 1982 but will first analyze financial
data provided by Poles and meet in Paris in May to decide what
should be done about 1982 debt. (C)
d
CONFIDENTIAL
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Nigeria: Nigeria's economic and financial situation continues
to be extremely precarious. Food supplies, for example, have
been cut back 40 percent over the last two years. Nigeria
refused to make fundamental policy adjustments, preferring to
tighten restrictions on imports. Key Nigerian officials have
hinted that they would like U.S. financial assistance. Under
Secretary Wallis presented a State proposal that $200 million
in CCC blended credits be offered immediately.. He noted that
Nigeria's economic policies were a disaster, but it is a key
political ally of the United States. We should consider
support for national security reasons. This August, Nigeria
will hold national elections. It is critical that these
elections go forward in a democratic manner, as planned.
Following the election, we would hope that Nigeria could begin
a process which would lead to economic discipline and
responsibility. He concluded. by saying that Nigeria does have
some flexibility increasing their oil production, but they
have been reluctant to since this may put downward pressure on
oil prices. OMB noted that care must be exercised in using
CCC for foreign aid purposes. Others voiced their concern that
we would want to have assurances that following the election
the Nigerians would begin a serious program of economic
discipline. Others wondered why we should bail out a country
which could increase its oil production and in so doing put
downward pressure on world oil prices -- to the benefit of
consuming nations. The Chairman asked Marc Leland to convene
a working group to review the State proposal to report back
to a future SIG-IEP meeting. (C)
Classified by MELeland
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