Rubin defends Asian bailouts, seeks IMF boost

Rubin defends Asian bailouts, seeks IMF boost

WASHINGTON (Reuters): The Clinton administration on Sunday defended its role in multibillion-dollar bailouts for Asia's embattled economies and said it expected Congress to boost IMF funding to cope with financial catastrophes.

"It is extremely important that the United States provide the kind of leadership that we are -- important because our economic interests are so much at stake," U.S. Treasury Secretary Robert Rubin told CBS's "Face the Nation" program.

A financial crisis has roiled markets throughout Asia and in much of the rest of the world. Three of the hardest-hit countries -- Indonesia, Thailand and South Korea -- were forced to seek multibillion-dollar bailout loans from the International Monetary Fund (IMF).

The United States and other rich countries have agreed to contribute billions of dollars to support the IMF-led bailouts.

But the Clinton administration's decision to join the rescue effort has drawn heavy fire from many U.S. lawmakers.

Some Republicans say American taxpayers should not bail out other countries responsible for their own financial crises.

They also accuse the Clinton administration of skirting Congress by using money in a special currency exchange fund. It falls under the exclusive control of Rubin, with President Bill Clinton's approval, so that it can be tapped without requesting permission from Congress.

Although Rubin said the market turmoil in Asia would not derail the U.S. economy, he insisted that it was crucial that the United States play its part and "provide leadership" to contain financial crises overseas.

"Our economic well-being is inevitably and inextricably going to be very much affected by well-being of nations around the world," Rubin said on CNN's "Late Edition".

"That's why we are so deeply involved in working with the international community to try to reestablish financial stability in South Korea, and try to limit the contagion and the spreading of these problems to other emerging and developing countries."

Rubin said the Clinton administration would press Congress when it reconvenes to approve legislation boosting IMF resources, which have been drained by loans in Asia.

Analysts expect a bitter struggle in Congress over the legislation, but Rubin told CNN it was his "hope and expectation" that Congress would approve the IMF increases.

Pending before Congress is legislation that would make an extra $3.5 billion available to the IMF for an emergency lending facility, as well as around $15 billion to cover the U.S. share of a quota increase to replenish funds approved by the IMF board in September.

"We've had very constructive discussions over the recess with the leaders in Congress, chairmen of the various committees and others," Rubin said.

He said these talks focused on the "enormous interest that our country has -- our economic interest, our national security interests -- in having a strong IMF that can help put in place rigorous reform programs and also provide the funding needed to get through difficult periods in these emerging countries."