§ 7. Mr. Skinnerasked the Chancellor of the Exchequer what recent discussions he has had with the International Monetary Fund regarding the international banking crisis; and if he will make a statement.
§ Mr. LawsonInternational debt problems were discussed at the annual meeting of the International Monetary Fund which I attended in Washington at the end of September. It is for each country to put its own house in order, but with the guidance and support of the fund. Hon. Members will have been encouraged in this connection by the approval last week by the United States Congress of increased IMF resources. As regards the world economic prospect, there is a clear expectation now of soundly based recovery, but the massive United States budget deficit continues to keep United States interest rates uncomfortably high.
§ Mr. SkinnerWill the Chancellor of the Exchequer confirm that Mexico, Brazil and Argentina owe more than $250 billion to British banks, other banks and foreign Governments? Will he acknowledge that every child born in those countries owes $1,000 before he opens his eyes? Is he aware that, while the World Bank does not have the money to provide sufficient food for the starving millions in Africa, the International Monetary Fund is being used as a kind of second mortgage company to bail out Western banks?
§ Mr. LawsonThe International Monetary Fund is not giving a penny to the countries mentioned by the hon. Gentleman. It is assisting these countries to put their own houses in order.
§ Mr. McCrindleOn the question of central and south America, which was raised by the hon. Member for Bolsover (Mr. Skinner), will my right hon. Friend extend a welcome to the news that there has been agreement to reschedule the debts that Brazil has incurred over the years? Does he agree that, as these things tend to happen together, this news is likely to improve the admittedly disagreeable situation that has existed in central and south America recently?
§ Mr. LawsonI am, indeed, pleased that agreement has been reached between the International Monetary Fund and the Brazilian Government on an adjustment programme for the Brazilian economy, and therefore on the loans from the International Monetary Fund, on the commercial bank loans, which ride on the International Monetary Fund's back, and, indeed, on a Paris Club rescheduling of debts as well. However, it is of fundamental importance that the Brazilian Government and the Brazilian economy stick to the adjustment programme which they have agreed with the fund.