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IMF Members Blame U.S. for Economic Ills : Claim Budget Deficit Boosts Interest Rates

October 10, 1985|Associated Press

SEOUL, South Korea — A chorus of top finance figures from around the world criticized the United States on Wednesday as aggravating poor countries' economic conditions.

Representatives of both poor and industrialized member countries of the International Monetary Fund and World Bank charged that the U.S. budget deficit boosts interest rates and hinders Third World growth.

"High real rates of interest in the United States accentuate the problems of the heavily indebted countries . . . and, in some cases, lead to drastic reductions in living standards," Greek Under Secretary for National Economy Yannis Papantoniou said.

'More Painful'

Reduction of the U.S. deficit "will be the more painful the longer it is postponed," Dutch Finance Minister Herman Ruding said.

Representatives from the IMF and World Bank's 149 member countries are holding their annual joint meeting in Seoul this week. The session ends Friday.

Other speakers also said an overvalued dollar hurts American industries and adds pressure in the United States to protect U.S. industries against imports.

"It is disturbing that the United States, which for years championed the cause of free trade and had the most important role in establishing the present international trading system, is now the country from which the cries for protectionism are strongest," Indonesian Finance Minister Radius Prawiro said.

New Talks Sought

South Korean Finance Minister Kim Mahn Je, whose government is itself often accused of sheltering its markets, called on the industrialized nations to lead the way toward economic growth by holding a new round of global trade talks.

"Rising protectionism in some industrial countries has caused us great concern by particularly hindering market access of developing countries," he said.

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