U.S. politicians attack IMF for its aid to Asia

U.S. politicians attack IMF for its aid to Asia

WASHINGTON (Reuters): The International Monetary Fund came under fire on Monday for its Asian bailouts as former Republican presidential candidate Steve Forbes said it and the Clinton administration were making the financial crisis worse.

"Along with the Clinton-Gore Treasury Department, this agency has been prolonging and deepening the currency crisis that is rolling more and more of the world," said Forbes, who is widely believed to be planning a presidential bid in 2000.

With that criticism, the millionaire publisher joined a growing list of prominent conservatives and liberals who oppose the IMF's multibillion-dollar bailouts in Asia.

In a letter to members of Congress, Forbes called on lawmakers to block billions of dollars in payments that would boost IMF resources, drained by huge loans to South Korea, Indonesia and Thailand.

At a community forum in Los Angeles, Federal Reserve Chairman Alan Greenspan was heckled by community activists for defending financial aid to Asia when poor neighborhoods in the United States needed help.

"It's a disgrace" and "You should be ashamed of yourself," some participants shouted at Greenspan.

In Washington, Sen. Alfonse D'Amato, a New York Republican who heads the Senate Banking Committee, said Congress must insist on "discipline and thoughtful action" before taxpayer dollars were put at risk in Asia.

He said his panel would investigate the bailouts immediately after Congress reconvened on Jan. 26.

The stepped-up attacks on the IMF come as Deputy U.S. Treasury Secretary Lawrence Summers met with Asian leaders during a week- long tour of the battered region. On Monday, Summers was in Indonesia, currently the focus of market anxiety after the rupiah nose-dived last week and stocks faced heavy selling.

The IMF has put together huge bailouts for South Korea, Thailand and Indonesia since the July 2 crash of the Thai baht, which sent shock waves across Southeast Asia. The United States and other rich countries have agreed to contribute billions of dollars to support IMF-led rescues.

When it reconvenes, Congress will be asked to make an extra $3.5 billion available to the IMF for an emergency lending facility and around $15 billion to cover the U.S. share of a quota increase to replenish IMF funds.

The Clinton administration said that the money was needed to keep the IMF strong and that U.S. economic and national security interests were at stake in Asia.

Opponents argue that American taxpayers should not be forced to prop up countries responsible for their own financial problems and that IMF policies are too harsh and will not work.

Forbes said members of Congress should "say no" to the "economically destructive" IMF. "Its austerity policies of devaluation and higher taxes are making the Asian economic crisis worse," he said.

Like Forbes, Jack Kemp, the unsuccessful Republican vice- presidential candidate in 1996, has urged Congress to withhold the IMF funds.

"I don't think that Congress should bail out Asia until we do a couple of things," Kemp said on NBC television on Sunday. "No. 1, require that the IMF change its policies."

Kemp and is also considering a presidential bid in 2000. D'Amato said he expected Treasury Secretary Robert Rubin and other senior officials to justify the bailouts to Congress.

"When Congress resumes we will ask the secretary of the Treasury and the appropriate officials to explain to us and to the American people what various courses of action they will be recommending," he said in a statement.