WASHINGTON, January 30: US businesses are likely to back US president Bill Clinton's request for money to help the International Monetary Fund (IMF) bailout for Asia in the hope that that tough reform packages will succeed where trade negotiations have failed.The administration is asking a skeptical Congress to approve about $19 billion of additional money for the IMF to replenish resources drained by multibillion-dollar bailouts for Indonesia, South Korea and Thailand. Business backing could be crucial for the administration, which faces stiff opposition from both the right and the left.
"We're not going to oppose this thing," said Andrew Card, president of the American Automobile Manufacturers Association. "I suspect that we will be lobbying to have a responsible level of assistance with the expectation that there will be fundamental change.
"The recent economic problems encountered in the countries of south-east Asia are serious and they do affect the performance of the US economy and the prospectsfor continued growth," Card told Reuters.
At the same time, Card and other US industry representatives worry that bailout money will be used to subsidise some of their biggest competitors. US executives contend they have benefited unfairly from subsidies, sweetheart deals and government-directed bank lending.
Auto, computer chip and steel manufacturers expressed early concerns to administration officials about aid money being used to rescue competitors who benefited from the cozy government deals and cushy lending practices that the United States has said contributed to Asia's financial turmoil.Representatives of those industries as well as others are expected to talk about the Asia crisis and Clinton's request for money for the IMF before Congress' House Banking Committee on Tuesday.
"We really believe that any aid going to South Korea has to be conditioned on structural reform to curb their overexpansion program and that it has to be closely monitored to ensure that they actually follow through withthat programme," said Julie Nash, spokeswoman for Micron Technology Inc.
Micron has been particularly outspoken because it is the only remaining US producer of Dynamic Random Access Memory (DRAM) chips following a huge push by South Korea to become a major exporter of the computer memory chips."That industry was developed in that country with export in mind," she said. "The government sanctioned and encouraged very large loans. That allowed them to overextend themselves and to overbuild in the industry. So now we have an excess of DRAM which has led to the longest downturn in this industry."
The deals worked out in recent months between the IMF and Asia's hardest-hit tiger economies include some banking and market reforms that US businesses hope will help level the playing field.
In accepting the IMF aid, the countries involved have admitted they made some mistakes in the past as they pursued rapid economic development and vowed to overhaul their policies.
"Trade negotiations have not been verysuccessful in opening up those markets and perhaps it takes this type of crisis to cause that fundamental reform," said one steel industry lobbyist.
"We have a vested interest in Asia not falling apart," added Jeff Weir, spokesman for the US Semiconductor Industry Association.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
