International Debt, Trade, and Financial Stabilization Act

(Reported to House from Committee on Banking, Finance and Urban Affairs with amendment, H.Rept. 99-577(Part I))

International Debt, Trade, and Financial Stabilization Act - Title I: Measuring the Impact of the Debt Crisis on World Trade, Development, and Financial Stability - Sets forth congressional findings with respect to the impact of the debt crisis on world trade, development, and financial stability.

Title II: Increasing World Bank Effectiveness - Requires the Secretary of the Treasury (the Secretary) to instruct the U.S. Executive Director of the International Bank for Reconstruction and Development (World Bank) to propose to the Bank's other directors that a temporary adjustment be made in current disbursement practices of such Bank that would permit, for at most four years, full release of committed loan funds to the central bank of the recipient country at the beginning of a project period, when appropriate and upon request of the recipient country, to the extent that: (1) adequate accounting safeguards can be maintained to insure that the terms of the respective loan agreements are honored; and (2) the recipient country adequately describes how the accelerated disbursement will contribute to long-term economic growth.

Requires the Secretary to instruct the U.S. Executive Directors of the multilateral development banks to propose to the other directors of such banks that each bank's share of any project loan already approved and awaiting disbursement should be immediately increased by the appropriate amount taking into account the current ability of the recipient country to meet its counterpart funding requirements.

Requires the Secretary, in order to promote the economic policy adjustments which are needed to help developing countries, to instruct the U.S. Executive Director of the World Bank to propose to the other directors of the World Bank that: (1) an increase be made in the amount of structural adjustment lending by the World Bank and any percentage limitation on the number of structural adjustment loans in such bank's lending portfolio be removed (reflecting the U.S. policy of favoring the addition of structural adjustment lending to the bank's loan mix); (2) appropriate action be taken to ensure that the aims of such lending can be achieved; (3) the conditionality of structural adjustment lending should include innovative requirements designed to minimize any adverse impact of such lending on the lowest income groups in the developing countries; and (4) appropriate action be taken to ensure that such lending is consistent with environmentally sound and responsible development practices.

Requires the Secretary to instruct the U.S. Director of the World Bank to enter into negotiations with other directors of such Bank and to propose the establishment of a fund within the World Bank that would make small-scale credit available to lower income groups in developing countries which have had no access to such credit.

Requires the Secretary to report to specified congressional committees on the effectiveness of increased reliance on structural adjustment lending as a means of achieving economic reforms.

Expresses the sense of the Congress that: (1) transfers of capital from developing countries pose an important problem that must be solved before the international debt crisis can be resolved and economic growth in developing countries can be enhanced and sustained; and (2) the U.S. Executive Director of the World Bank should initiate discussions with other directors of the Bank to develop policy proposals to reduce the level of capital transfers from the developing countries and the impact of such capital flight on the economies of such countries and report any such proposals to the Secretary and the Chairman of the Federal Reserve Board.

Requires the Secretary to instruct the U.S. Executive Directors of the multilateral development banks to propose to the other directors of their banks that each such bank should increase lending in order to reform the financial sectors of indebted developing countries with particular emphasis on increases in loans for activities which would enlarge the capital markets of such countries and encourage domestic savings in such countries.

Requires the President to initiate negotiations with other member nations of the World Bank to: (1) provide for the establishment of a banking entity or affiliate which would be authorized to offer stock for public subscription and borrow money and issue bonds and notes; and (2) authorize such banking entity or affiliate to make or guarantee loans.

Requires the Secretary to study the need for a general increase in the amount of capital of the World Bank. Requires the Secretary to report to specified congressional committees on the findings of such study.

Title III: Increasing World Trade and Economic Growth - Expresses the sense of the Congress that the expansion and liberalization of world trade can make an important contribution to the development of developing countries and sustained growth in other countries.

Declares that it is U.S. policy that any aid provided to developing nations shall be consistent with and supportive of long-term trade liberalization in those countries and in worldwide markets.

Requires the Secretary to instruct the U.S. Executive Directors of the multilateral development banks to: (1) propose to the other directors of their banks that all new loans or guarantees made by such banks shall be consistent with the reduction of existing trade and investment barriers or of market access limitations of the recipient countries; (2) vote against any loan that would be inconsistent with the advancement of trade liberalization and increased market access within recipient countries; (3) propose to other directors of their banks that the structural adjustment loans and the sectoral loans described in title II not be approved until an assessment is made of the extent to which the extension of such loans will promote trade liberalization and market access; (4) provide information and assistance to U.S. firms interested in bidding on projects in recipient countries and investigate complaints by U.S. bidders about the awarding of bank procurement contracts; (5) promote opportunities for export from the United States; and (6) ensure that project loans do not contribute to world market surpluses.

Requires the Secretary to instruct the U.S. Director of the World Bank to propose to the other directors of the Bank that the Bank coordinate its actions more closely with the actions of the Contracting Parties to the General Agreements on Tariffs and Trade (GATT) so that GATT actions that liberalize trade are rewarded by appropriate additional World Bank capital.

Requires the Secretary to instruct the U.S. Director of the World Bank to propose to the other directors of the Bank that the Bank seek GATT cooperation in acquiring information for and in preparing the bank's annual country-by-country review.

Requires the Secretary to arrange for the appointment of a foreign commerce officer to serve with each of the U.S. Executive Directors of multilateral development banks.

Requires the President and the Secretary to try to continue ongoing negotiations with West Germany, the United Kingdom, France, and Japan and to initiate negotiations with other countries in order to: (1) coordinate macroeconomic policies to promote economic growth and stable exchange rates; (2) achieve sustained economic growth and thereby increase the market for exports from the United States and developing countries; (3) promote growth-oriented economic policies; and (4) encourage all countries to base growth on a balance of foreign and domestic demand.

Declares that a key U.S. objective in its participation in international economics or trade discussions is to encourage industrial countries to pursue polices that will promote economic growth and increase the size of the market for exports from the United States and the developing countries. Requires the President and the Secretary to try to place such discussions on the agenda of any economic summit and to report to the Congress on the results of such efforts.

Requires the Secretary to initiate consultations with countries that hold debt of developing countries in order to examine possible options for reducing the debt burden of developing countries that export oil.

Requires the President to arrange for bartering surplus agricultural commodities for oil from debtor developing countries.

Title IV: Insuring the Stability of the International Financial System - Requires the Secretary, in conjunction with the Comptroller of the Currency and the Chairman of the Federal Reserve Board, to explore the changes in the structure of U.S. capital markets and the regulation of private financial institutions which would be necessary to resolve the international debt crisis in a manner which is consistent with both increased growth in debtor nations and increased stability of the U.S. financial system. Sets forth certain proposals to be analyzed in such study. Requires the Secretary to report to specified congressional committees on such study.

Requires the Secretary to instruct the U.S. Executive Directors of the multilateral development banks to propose to the other directors of such banks that: (1) each bank make greater use of co-financing to encourage increased commercial bank participation in lending by such bank; and (2) steps be taken to make credits available to satisfy the capital needs of small businesses owned by the very poorest individuals in the developing countries.

Title V: Multilateral Investment Guarantee Agency - Multilateral Investment Guarantee Agency Act - Authorizes the President to accept membership for the United States in the Multilateral Investment Guarantee Agency (a partof the World Bank). Provides for: (1) a U.S. Governor and Alternate Governor of the Agency; (2) application of certain sections of the Bretton Woods Agreements Act; (3) certain restrictions on U.S. financing of the Agency; and (4) Federal Reserve Banks acting as depositories of the Agency.

Grants Federal courts jurisdiction over actions by or against the Agency.

Title VI: Inter-American Development Bank - Amends the Inter-American Development Bank Act to authorize the U.S. Governor of the Inter-American Development Bank to agree to specified amendments to the Articles of Agreement.

Requires the Secretary to instruct the U.S. Executive Director of the Inter-American Development Bank to propose to the other directors of such bank that any replenishment agreement which is negotiated after enactment of this Act allow for the waiver of country program limitations contained in the replenishment agreement if the directors make specified findings.