338. Note From the Under Secretary of State for Economic Affairs (Wallis) to Secretary of State Shultz1
Thanks for the Volcker statement on cooperation between the IMF and the IBRD.2 This is an idea which we in State have been pushing for about two years. To begin with, any mention of structural adjustment loans by the IBRD generated tantrums in the Treasury people. Apparently SAL’s have had a bad record of just disappearing without a trace. In fact, there is a 10% ceiling on the amount of IBRD lending that can be in SAL’s.
When we got the point to sink in that the adjustments should be essentially the kind that the IMF insists on, and that Volcker recommends in this statement, Treasury came around. With their effective assistance we were then able to get this into the Summit statement at Bonn (and, if I recall correctly, also at London).
Both the IMF and the IBRD react positively to remarks about better coordination. It is hard to claim much practical result yet, and this is something that should be kept in mind when a new term of the World Bank presidency comes up.
- Source: Department of State, Files of the Under Secretary of State for Economic Affairs, W. Allen Wallis, Chrons; Memo to the Secretary/Staff and Departmental/Other Agencies; Memos to the Files; White House Correspondence, 1987–1987, Lot 89D378: Memos to the Secretary August 2–September 27, 1985. Confidential. A blind copy was sent to McMinn.↩
- The statement by Volcker is ibid.↩
- Wallis initialed “AW” above his typed signature.↩