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349. Memorandum From the Under Secretary of State for Economic Affairs (Cooper) to Secretary of State Muskie 1

IMF and IBRD Reaction to the Chairman’s Text on Procedures Governing Global Negotiations

As you requested I spoke this afternoon to Bob McNamara and Jacques de Larosiere, Managing Director of the IMF, about the draft text on procedures to govern global negotiations.2

McNamara indicated that he despaired about global negotiations. If it follows past practice in ECOSOC and elsewhere in the UN, it will lead to rhetoric rather than results. UN and ECOSOC resolutions have not gotten in the way of tangible progress so far, but he did not want it to get in the way in the future. He plans to push ahead with those improvements in the Bank’s funding and programs which he considers important. He indicated that a negotiated “package” involving Bank activities would be “impossible” and he relies on the good sense of American officials to keep any attempt to negotiate a package deal in New York from deflecting or delaying desirable changes in the Bank’s activities. He indicated that he was not entirely clear what global negotiations would mean for the World Bank, but he would find totally unacceptable any attempt to negotiate on such items as capital increases or the Bank’s gearing ratio.

De Larosiere indicated, after having read and reflected on the text, that he does not like it at all. He singled out especially the phrase indicating that the conference would be “the forum for . . . conducting negotiations”. He said that for the UN to give instructions to the IMF on matters under its competence, such as disposition of its gold, and SDR link to foreign aid, or modifications in its voting procedures, would disrupt the IMF as a result of conflicting pressures. He acknowledged that formally the IMF is fully protected by its charter but to have such instructions come from the UN would be politically very awkward and disruptive. De Larosiere volunteered that he thought he was not adequately protected by the provision in the text calling for consensus on important matters. He said that the General Assembly would decide by majority vote which matters are important, and this itself would be[Page 1100]come a source of conflict. He urged us to be very cautious about this provision as currently phrased.

  1. Source: National Archives, RG 59, Office of the Secretariat Staff, Records of the Under Secretary of State for Economic Affairs, Richard N. Cooper, 1977–1980, Lot 81D134, Box 7, E—Memoranda of Conversations, Jan. 1980–June 1980. Confidential; Eyes Only. Copies were sent to Christopher and Secretary of the Treasury Miller.
  2. See Document 348.