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    "ocrText": "Originally Processed With FOIA(s):\nFOIA Number:\nS\nFOIA\nMARKER\nThis is not a textual record. This is used as an\nadministrative marker by the George Bush Presidential\nLibrary Staff.\nRecord Group/Collection:\nGeorge H.W. Bush Presidential Records\nCollection/Office of Origin:\nSpeechwriting, White House Office of\nSeries:\nSpeech File Draft Files\nSubseries:\nChron File, 1989-1993\nOA/ID Number:\n13504\nFolder ID Number:\n13504-005\nFolder Title:\nWorld Bank/IMF Annual Meeting 9/27/89 [OA 4390] [1]\nStack:\nRow:\nSection:\nShelf:\nPosition:\nG\n25\n6\n5\n3\nDocument No.\ncalled in\nWHITE HOUSE STAFFING MEMORANDUM\nNC on 9/24 S\n9/22/89\nDATE:\nACTION/CONCURRENCE/COMMENT DUE BY: MONDAY, SEPT. 25, 2:00 p.m.\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nSUBJECT:\nWASHINGTON, DC\nWEDNESDAY, SEPTEMBER 27, 1989\n(9/22 - draft three)\nACTION FYI\nACTION FYI\nVICE PRESIDENT\nMCCLURE\n\"\nSUNUNU\nNEWMAN\nSCOWCROFT\nPORTER\nDARMAN\nSTUDDERT\nBATES\nUNTERMEYER\nBOSKIN\nBREEDEN\nPINKERTON\nCARD\nROGERS\nCICCONI\nWINSTON\nDEMAREST\nFITZWATER\nGRAY\nHAGIN\nREMARKS:\nPlease provide comments/edits directly to Chris Winston,\nRoom 122, x2930 with a copy to my office by Monday, September 25\nat 2:00 p.m. Thank you.\nRESPONSE:\nN.C. H 12 SEP 68\nJames W. Cicconi\nAssistant to the President\nand Deputy to the Chief of Staff\nExt. 2702\n09 SEP 22\nMcNally/Simon\nSeptember 22, 1989\nDraft Three (B:IMF)\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nWASHINGTON, D.C.\nWEDNESDAY, SEPTEMBER 27, 1989\n[[ACKNOWLEDGEMENTS]]\nIt is a pleasure for me to be here this morning, and to\nwelcome you to Washington.\nAnd it is a special privilege for me to be here in the\ncompany of my old friend, Barber Conable.\nAlmost 20 years ago, when Barber sat next to me in the House\nWays and Means Committee, we had a bet about who would be first\nto become President. [[PAUSE]] We never said, \"President of\nwhat\" -- so now Barber claims he beat me by two years. [[PAUSE]]\nRemember the reaction when Barber was named bank president?\nThe headlines all said: \"BARBARA WHO?\" [[PAUSE]] That's okay.\nUntil this year, the same thing happened all the time to Barbara\nBush. [[PAUSE]]\nWe in the United States are keenly aware of the importance\nof these annual gatherings, and we are proud that we can be your\nhosts. We regard these meetings as key events -- events that\ndrive the work of all of us in maintaining a strong international\neconomic and financial system.\nThis is my first opportunity to speak to you as President.\nBut I have followed the activities of the International Monetary\nFund and the World Bank throughout my years of public service. I\n2\nhave visited many of your homelands, and seen first-hand the\nproblems created by inadequate growth and development -- problems\nthat your two distinguished institutions are working to solve.\nBut today, we're here to talk not about problems -- but\nabout solutions.\nWe have witnessed a dramatic shift over the past few years\nin the debate over how to achieve sustained growth and\ndevelopment.\nAnd although not a banker, you should know that I do have a\ndegree in economics. It taught me one simple lesson: When\nyou're standing in front of the world's greatest concentration of\nfinancial genius -- don't talk about economics. [[PAUSE]]\nLet's talk instead about FREEDOM.\nAll across the world, there has been an almost simultaneous\nrediscovery of the power created when individuals are given the\nfreedom to decide -- the freedom to act in their own best\ninterests.\nTrue, we're here today mainly to discuss economic freedom.\nBut make no mistake. In the end, both economic freedom -- and\npolitical freedom -- are essential and inseparable companions on\nthe road to national prosperity.\nThe jury is no longer out. Take any one people, give them\ntwo sets of rules, and see who prospers and who struggles. There\nare two Germanys, two Chinas, and two Koreas. It's been almost\n50 years. Let's put an end to economic experiment. Because\nhistory has decided. [[PAUSE]]\n3\nIt is not climate, natural resources, or cultural traditions\nthat make the difference. I said it in my inuagural address:\n\"We know what works: Freedom works. We know what's right:\nFreedom is right. We know how to secure a more just and\nprosperous life for man on Earth: through free markets, free\nspeech, free elections, and the exercise of free will unhampered\nby the state.' [[PAUSE]]\nIn Latin America, Africa, and elsewhere, courageous leaders\nare turning away from state control of their economies. Through\neconomic restructuring and deregulation, they are opening the\ndoor to private initiative. And already they are seeing results.\nIn Mexico, for example, sound economic policies adopted by\nthe Salinas government are pointing to a return of flight\ncapital, and increased foreign investment.\nEven more stunning is the transformation in thinking in the\ncommunist countries -- not only in the Soviet Union, but in\nEastern Europe.\nOur recent travels among the people of Poland and Hungary\nled to many dramatic and stirring encounters. But almost as much\nas we were impressed by the people, we were impressed by the\nalmost universal acceptance of the free market as the best hope\n-- indeed, the only hope -- for reversing the economic fortunes\nof these two proud countries.\nThe rediscovery of these basic truths in the East has been\nmatched by a recommitment to them in the West. Today the members\n4\nof the European Community are dedicated to eliminating internal\nbarriers to economic activity by the year 1992.\nThe Peruvian economist, Hernando de Soto, has helped us\nunderstand this worldwide phenomenon by documenting the process\nin Latin America.\nde Soto was raised in Peru, and educated there and in\nEurope, where he lived until 1979. But the chronic privation of\nhis homeland haunted him. Rather than analyzing flow-charts or\nofficial statistics for the answer, he began walking the streets\nof Lima.\nHe found that the poor of Latin America -- who have never\nread Jefferson or Adam Smith -- ran their affairs democratically,\noutside the formal economy, organizing their private, parallel\neconomy in a free and unregulated manner.\nde Soto's great contribution has been to point out what, in\nretrospect, may seem obvious: People everywhere want the same\nthings. And when left alone by government, people everywhere\norganize their lives in remarkably similar ways.\nde Soto's prescription has been successful everywhere it's\nbeen tried. Governments must bring the \"informal\" workers into\nthe regular economy -- and then get out of the way, and let\nindividual enterprise flourish.\nThe wider application of these principles within our\neconomies is critical to achieving the stronger, more prosperous,\nglobal economy of tomorrow.\n5\nWe each must do our part. The industrial countries have a\nspecial responsibility. We must coordinate economic policies to\nhelp provide sustained growth with low inflation and greater\nstability in exchange markets.\nWe in the United States are working especially hard to\nreduce the federal budget deficit, and to increase our national\nsavings rate.\nAll our nations have a responsibility to ensure a fair and\nopen trading system. We have a tremendous opportunity to advance\nthat cause now, by making a success of the Uruguay Round of trade\nnegotiations.\nMaking the political commitments necessary to ensure a\nsuccess will not be easy in any of our countries. But it must be\ndone. We must strengthen the GATT, and allow our markets to open\nin a mutual, step-by-step fashion.\nAs we seek to extend and expand growth in the world economy,\nthe debt problems faced by developing countries are central to\nthe agendas of the IMF and the World Bank. Over the past year,\nthe international community's strengthened approach to these\nproblems has provided new hope for debtor nations.\nAmerica's Secretary of the Treasury, my good friend Nick\nBrady, has helped direct the focus on debt relief, bringing\ndeveloping nations and commercial banks back to where they belong\n-- the negotiating table.\nQuick action by both the IMF and the World Bank has given\nthis new strategy vital support. By making clear the terms under\n6\nwhich they will support the reduction of debt burdens -- and by\nworking with countries to develop the necessary economic reform\nprograms -- these institutions have made it possible to reduce\ndebt burdens without eliminating growth.\nThanks to these initiatives, the United States was able to\nbroker an agreement in July between Mexico and its biggest\nprivate lenders. The deal enabled Mexico to make enormous\nprogress against its debt burden -- some ten to twelve billion\ndollars.\nThis agreement underscores the benefits other debtor\ncountries stand to realize from this approach. Mexico's savings\nfrom this package will free resources for productive use in the\neconomy, leading to increased investment and improved growth.\nWhat Mexico has done is not a miracle. It is a product of\nhard work and sustained commitment.\nMy father, Prescott Bush, Sr., was a successful businessman,\na banker whose forte was reorganizing failing companies, turning\nmoney losers into profit makers. Dad believed in the old Ben\nFranklin almanac maxims when it came to earning, saving, and\nspending. We grew up understanding that life isn't an open-ended\nchecking account.\nThe strengthened debt strategy is flexible enough to address\nthe unique needs of each country. But the strategy will not work\nwithout sound economic policies in debtor countries.\nInefficient, unrealistic, and growth-stifling policies must\ngo. Benefits are available to a broad range of other countries\n7\nthat pursue economic reforms. Several are now actively engaged\nwith the IMF and World Bank, and with the banking community --\nCosta Rica, Venezuela, and Morocco, to name a few.\nCommercial banks have a special role in making this process\nwork. It is important that the banks follow through on efforts\nmade with Mexico and the Philippines, and sustain this momentum\nwith other countries.\nWe encourage these efforts not as self-sacrifice -- but as\nself-interest. True, success not only will help the debtor\nnations. But it will also strengthen the banks, by putting their\nportfolios on a sounder footing.\nOne of the lessons of the 1980's, especially the debt\ncrisis, is that we're all in this together. And when we\ncooperate, we all come out winners.\nThe IMF and the World Bank are at the crossroads of our\ncooperative efforts. They are distinct institutions, even though\ntheir work is complementary and their objectives often overlap.\nThe IMF must continue to foster the sound economic policies\nnecessary for sustained growth. As part of that responsibility,\nthe Fund has assumed an important and welcome role in the\nstrengthened debt strategy.\nThe United States believes that the IMF must have adequate\nresources to fulfill its critical role. We will continue to work\nwith other members, in the hope of completing the current review\nof quotas by the end of the year.\n8\nHowever, if we are to ask our taxpayers to put up additional\nresources, they must be assured that the funds are truly needed,\nand will be used prudently and effectively to achieve shared\nobjectives.\nWe all look to the World Bank to help build the foundation\nfor a future global prosperity that reaches all our citizens.\nIts efforts to promote structural reform and development are\ncrucial to resolving debt problems. The Bank's decisions to take\non new responsibilities on the debt front are welcome.\nTo promote the Bank's objectives, the international\ncommunity established the International Development Agency within\nthe Bank as a means of providing concessional resources to the\npoorest countries. We must all continue to support its\nactivities.\nWe have also learned, as I emphasized Monday at the U.N.,\nand last summer at the Group of Seven, that environmental\ndestruction knows no borders.\nThe twin evils of crushing debt levels and a deteriorating\nenvironment threaten not only the development, but even the\nstability of our neighbors in Latin America, Africa, parts of\nAsia and even Europe. And global warming and rapid deforestation\npose a threat to all humankind.\nWe face unprecedented problems. We need -- and we can find\n-- unprecedented solutions.\nTo make growth truly sustainable, we must weigh\nenvironmental considerations more heavily as we make economic\n9\ndecisions. Let us charge those responsible for managing debt\nreduction with finding ways and means to strengthen development\nstrategy through \"debt for nature transactions\" and other\ninnovative plans.\nBecause with leadership, problems can become opportunities.\nOver the years -- as we've come to understand the crippling\neffects environmental destruction can have on the long-term\ngrowth of developing countries -- the World Bank has increased\nthe priority it assigns to environmental concerns. The Bank has\nintroduced such topics as reforestation, biological diversity,\nair pollution, and waste disposal, into its country programming\nand economic policy dialogue. We applaud these efforts. And we\nwill continue to support them.\nIn addressing the challenges of the 1980's, we have come to\na deeper understanding of the importance of cooperating as a\ncommunity of nations to address common problems.\nThis, too, is a matter of returning to basic truths. More\nthan thirty years ago, President Eisenhower spoke to this group\nabout his experiences in wartime. He recalled working with\ngroups that had to develop real cooperation among themselves --\nor there could be no success.\nIke noted, as I do now, that there were people in the\naudience who were our allies in that grand effort. He said:\n\"We early found one thing: without the heart, without the\nenthusiasm for the cause in which we were working, no cooperation\n10\nwas possible. With that enthusiasm, subordinating all else to\nthe advancement of the cause, cooperation was easy.\"\nToday our mutual efforts to improve global growth, to ease\nthe burdens of developing country indebtedness, and to open up\nmarkets for trade, have demonstrated anew that progress is best\nachieved by facing pressing issues together.\nThis is a lesson we must carry with us into the 1990's if we\nare to pass on to future generations a global economy that is\nstrong and resilient, and able to provide for the aspirations of\nthe citizens of all our countries.\nThank you for your hard work, your service, your commitment.\nAnd thank you for coming to Washington. Godspeed you in your\nefforts here, and God bless you and the nations you represent.\n#\n#\n#\nREMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nWASHINGTON, D.C.\nWEDNESDAY, SEPTEMBER 27, 1989\n9:35 A.M.\nTHANK YOU. AND THANKS ESPECIALLY TO MY GOOD\nFRIEND NICK BRADY, FOR THOSE WARM WORDS, AND FOR HIS\nOUTSTANDING ECONOMIC LEADERSHIP -- BOTH AT HOME, AND\nABROAD. [[PAUSE]]\nCHAIRMAN LEE, PRESIDENT CONABLE, MR. CAMDESSUS\n[[KAHM-DEH-S00]] IT IS A PLEASURE FOR ME TO BE HERE\nTHIS MORNING, AND TO WELCOME YOU TO WASHINGTON. AND IT\nIS A SPECIAL PRIVILEGE FOR ME TO BE HERE IN THE COMPANY\nOF MY OLD FRIEND, BARBER CONABLE.\nWE IN THE UNITED STATES ARE KEENLY AWARE OF THE\nIMPORTANCE OF THESE ANNUAL GATHERINGS, WHICH DRIVE THE\nWORK OF ALL OF US IN MAINTAINING A STRONG INTERNATIONAL\nECONOMIC AND FINANCIAL SYSTEM.\n- 2 -\nTHIS IS MY FIRST OPPORTUNITY TO SPEAK TO YOU AS\nPRESIDENT. BUT I HAVE FOLLOWED THE ACTIVITIES OF THE\nINTERNATIONAL MONETARY FUND AND THE WORLD BANK\nTHROUGHOUT MY YEARS OF PUBLIC SERVICE. I HAVE VISITED\nMANY OF YOUR HOMELANDS, AND SEEN FIRST-HAND THE\nPROBLEMS CREATED BY INADEQUATE GROWTH AND\nDEVELOPMENT -- PROBLEMS THAT YOUR TWO DISTINGUISHED\nINSTITUTIONS ARE WORKING TO SOLVE.\nWE HAVE WITNESSED A DRAMATIC SHIFT OVER THE PAST\nFEW YEARS IN THE DEBATE OVER HOW TO ACHIEVE SUSTAINED\nGROWTH AND DEVELOPMENT.\nALL ACROSS THE WORLD, THERE HAS BEEN AN ALMOST\nSIMULTANEOUS REDISCOVERY OF THE POWER CREATED WHEN\nINDIVIDUALS ARE GIVEN THE FREEDOM TO ACT IN THEIR OWN\nBEST INTERESTS.\nTRUE, WE'RE HERE TODAY MAINLY TO DISCUSS ECONOMIC\nFREEDOM. BUT MAKE NO MISTAKE. IN THE END, BOTH\nECONOMIC FREEDOM -- AND POLITICAL FREEDOM -- ARE\nESSENTIAL AND INSEPARABLE COMPANIONS ON THE ROAD TO\nNATIONAL PROSPERITY.\n- 3 -\nTHE JURY IS NO LONGER OUT. LOOK AT THE TWO\nECONOMIC SYSTEMS AND SEE WHO HAS PROSPERED AND WHO HAS\nSTRUGGLED. 11 LET'S PUT AN END TO THIS ECONOMIC\nEXPERIMENT. \\/\\/ BECAUSE HISTORY HAS DECIDED.\n[[PAUSE]]\nIT IS NOT CLIMATE, NATURAL RESOURCES, OR CULTURAL\nTRADITIONS THAT MAKE THE DIFFERENCE. I SAID IT IN MY\nINAUGURAL ADDRESS:\n\"WE KNOW WHAT WORKS: FREEDOM WORKS. WE KNOW HOW\nTO SECURE A MORE JUST AND PROSPEROUS LIFE FOR MAN ON\nEARTH: THROUGH FREE MARKETS, FREE SPEECH, FREE\nELECTIONS, AND THE EXERCISE OF FREE WILL UNHAMPERED BY\nTHE STATE.\" [[PAUSE]]\nIN LATIN AMERICA, AFRICA, AND MEXICO, COURAGEOUS\nLEADERS ARE TURNING AWAY FROM STATE CONTROL OF THEIR\nECONOMIES. ECONOMIC RESTRUCTURING AND DEREGULATION ARE\nOPENING THE DOOR TO PRIVATE INITIATIVE. AND ALREADY\nTHEY ARE SEEING RESULTS.\n- 4 -\nEVEN MORE STUNNING IS THE TRANSFORMATION IN\nTHINKING IN THE COMMUNIST COUNTRIES -- IN BOTH THE\nSOVIET UNION AND IN EASTERN EUROPE.\nDURING OUR RECENT TRAVELS IN POLAND AND HUNGARY,\nWE WERE IMPRESSED BY THE PEOPLE. BUT WE WERE ALSO\nIMPRESSED BY THE ALMOST UNIVERSAL ACCEPTANCE OF THE\nFREE MARKET AS THE BEST HOPE -- INDEED, THE ONLY\nHOPE -- FOR REVERSING THE ECONOMIC FORTUNES OF THESE\nTWO PROUD COUNTRIES.\nAND WE WELCOME THE EFFORTS OF THE SOVIET UNION TO\nLIBERALIZE AND DECENTRALIZE THEIR ECONOMY. I HAVE SAID\nMANY TIMES THAT I WANT TO SEE PERESTROIKA SUCCEED. A\nMORE OPEN AND HUMANE SOVIET UNION CAN ONLY BE IN THE\nINTEREST OF THE WEST. AND AS WE SEE THE EVIDENCE OF\nTHAT REFORM, WE CAN MATCH IT WITH STEPS OF OUR OWN.\n- 5 -\nTHE REDISCOVERY OF THESE BASIC TRUTHS IN THE EAST\nHAS BEEN MATCHED BY A RECOMMITMENT TO THEM IN THE WEST.\nTODAY THE MEMBERS OF THE EUROPEAN COMMUNITY ARE\nDEDICATED TO ELIMINATING INTERNAL BARRIERS TO ECONOMIC\nACTIVITY BY THE END OF 1992. AND, EUROPE'S LEADERS\nASSURE ME THAT THIS WILL NOT BE AT THE COST OF NEW\nEXTERNAL BARRIERS TO TRADE WITH THE E.C.\nTHE PERUVIAN ECONOMIST, HERNANDO DE SOTO, HAS\nHELPED US UNDERSTAND A WORLDWIDE ECONOMIC PHENOMENON.\nBY WALKING THE STREETS OF LIMA, NOT ANALYZING OFFICIAL\nSTATISTICS, HE FOUND THAT THE POOR OF LATIN AMERICA --\nWHO HAVE NEVER READ JEFFERSON OR ADAM SMITH -- RAN\nTHEIR AFFAIRS DEMOCRATICALLY, OUTSIDE THE FORMAL\nECONOMY, ORGANIZING THEIR PRIVATE, PARALLEL ECONOMY IN\nA FREE AND UNREGULATED MANNER.\nDE SOTO'S GREAT CONTRIBUTION HAS BEEN TO POINT OUT\nWHAT, IN RETROSPECT, MAY SEEM OBVIOUS: PEOPLE\nEVERYWHERE WANT THE SAME THINGS. AND WHEN LEFT ALONE\nBY GOVERNMENT, PEOPLE EVERYWHERE ORGANIZE THEIR LIVES\nIN REMARKABLY SIMILAR WAYS.\n- 6 -\nDE SOTO'S PRESCRIPTION OFFERS A CLEAR AND\nPROMISING ALTERNATIVE TO ECONOMIC STAGNATION IN LATIN\nAMERICA AND OTHER PARTS OF THE WORLD. GOVERNMENTS MUST\nBRING THE \"INFORMAL\" WORKERS INTO THE REGULAR\nECONOMY -- AND THEN GET OUT OF THE WAY, AND LET\nINDIVIDUAL ENTERPRISE FLOURISH.\nWE EACH MUST DO OUR PART. THE INDUSTRIAL\nCOUNTRIES HAVE A SPECIAL RESPONSIBILITY. WE MUST\nCOORDINATE ECONOMIC POLICIES TO HELP PROVIDE SUSTAINED\nGROWTH WITH LOW INFLATION, REDUCED TRADE IMBALANCES,\nAND GREATER STABILITY IN EXCHANGE MARKETS.\nWE IN THE UNITED STATES ARE WORKING ESPECIALLY\nHARD TO REDUCE THE FEDERAL BUDGET DEFICIT, AND TO\nINCREASE OUR NATIONAL SAVINGS RATE.\nALL OUR NATIONS HAVE A RESPONSIBILITY TO ENSURE A\nFAIR AND OPEN TRADING SYSTEM. WE HAVE A TREMENDOUS\nOPPORTUNITY TO ADVANCE THAT CAUSE NOW, BY MAKING A\nSUCCESS OF THE URUGUAY ROUND OF TRADE NEGOTIATIONS.\n- 7 -\nMAKING THE POLITICAL COMMITMENTS NECESSARY TO\nENSURE A SUCCESS WILL NOT BE EASY, BUT WE MUST\nSTRENGTHEN THE GATT, AND ALLOW OUR MARKETS TO OPEN IN A\nMUTUAL, STEP-BY-STEP FASHION.\nAS WE SEEK TO EXTEND AND EXPAND GROWTH IN THE\nWORLD ECONOMY, THE DEBT PROBLEMS FACED BY DEVELOPING\nCOUNTRIES ARE CENTRAL TO THE AGENDAS OF THE IMF AND THE\nWORLD BANK. OVER THE PAST YEAR, THE INTERNATIONAL\nCOMMUNITY'S STRENGTHENED APPROACH TO THESE PROBLEMS HAS\nPROVIDED NEW HOPE FOR DEBTOR NATIONS.\nAMERICA'S SECRETARY OF THE TREASURY, NICK BRADY,\nHAS HELPED DIRECT THE FOCUS ON DEBT REDUCTION AS A\nCOMPLEMENT TO CONTINUED NEW LENDING -- BRINGING\nDEVELOPING NATIONS AND COMMERCIAL BANKS BACK TO WHERE\nTHEY BELONG: THE NEGOTIATING TABLE.\n- 8 -\nQUICK ACTION BY BOTH THE IMF AND THE WORLD BANK\nHAS GIVEN THIS NEW STRATEGY VITAL SUPPORT. BY MAKING\nCLEAR THE TERMS UNDER WHICH THEY WILL SUPPORT THE\nREDUCTION OF DEBT BURDENS -- AND BY WORKING WITH\nCOUNTRIES TO DEVELOP THE NECESSARY ECONOMIC REFORM\nPROGRAMS -- THESE INSTITUTIONS HAVE MADE IT POSSIBLE TO\nREDUCE DEBT BURDENS AND PROVIDE A SOLID FOUNDATION FOR\nGROWTH.\nTHANKS TO THESE INITIATIVES, MEXICO REACHED AN\nAGREEMENT WITH ITS CREDITOR BANKS ENABLING MEXICO TO\nMAKE ENORMOUS PROGRESS IN REDUCING ITS DEBT BURDEN. IT\nALSO HELPED RESTORE CONFIDENCE IN THE MEXICAN ECONOMY\nWHICH HAS ALREADY RESULTED IN A RETURN OF CAPITAL AND\nNEW FOREIGN INVESTMENT.\nTHIS AGREEMENT UNDERSCORES THE BENEFITS OTHER\nDEBTOR COUNTRIES STAND TO REALIZE FROM THIS APPROACH.\nMEXICO'S SAVINGS FROM THIS PACKAGE WILL FREE RESOURCES\nFOR PRODUCTIVE USE IN THE ECONOMY, LEADING TO INCREASED\nINVESTMENT AND IMPROVED GROWTH.\n- 9 -\nWHAT MEXICO HAS DONE IS NOT A MIRACLE. IT IS A\nPRODUCT OF HARD WORK AND SUSTAINED COMMITMENT.\nTHE STRENGTHENED DEBT STRATEGY IS FLEXIBLE ENOUGH\nTO ADDRESS THE UNIQUE NEEDS OF EACH COUNTRY. BUT THE\nSTRATEGY WILL NOT WORK WITHOUT SOUND ECONOMIC POLICIES\nIN DEBTOR COUNTRIES.\nINEFFICIENT, UNREALISTIC, AND GROWTH-STIFLING\nPOLICIES MUST GO. BENEFITS ARE AVAILABLE TO A BROAD\nRANGE OF OTHER COUNTRIES THAT PURSUE ECONOMIC REFORMS.\nSEVERAL ARE NOW ACTIVELY ENGAGED WITH THE IMF AND WORLD\nBANK, AND WITH THE BANKING COMMUNITY.\nCOMMERCIAL BANKS HAVE A SPECIAL ROLE IN MAKING\nTHIS PROCESS WORK AND MUST FOLLOW THROUGH ON EFFORTS\nMADE WITH MEXICO AND THE PHILIPPINES, AND BROADEN THEIR\nEFFORTS WITH OTHER COUNTRIES.\nWE ENCOURAGE THESE STEPS NOT AS SELF-SACRIFICE --\nBUT AS SELF-INTEREST. TRUE, SUCCESS NOT ONLY WILL HELP\nTHE DEBTOR NATIONS. BUT IT WILL ALSO STRENGTHEN THE\nBANKS, BY PUTTING THEIR PORTFOLIOS ON A SOUNDER\nFOOTING.\n- 10 -\nONE OF THE LESSONS OF THE 1980'S, ESPECIALLY THE\nDEBT CRISIS, IS THAT WE'RE ALL IN THIS TOGETHER. AND\nWHEN WE COOPERATE, WE ALL COME OUT WINNERS.\nTHE IMF AND THE WORLD BANK ARE AT THE CROSSROADS\nOF OUR COOPERATIVE EFFORTS. THE IMF MUST CONTINUE TO\nFOSTER THE SOUND ECONOMIC POLICIES NECESSARY FOR\nSUSTAINED GROWTH. AS PART OF THAT RESPONSIBILITY, THE\nFUND HAS ASSUMED AN IMPORTANT AND WELCOME ROLE IN THE\nSTRENGTHENED DEBT STRATEGY.\nTHE UNITED STATES RECOGNIZES THAT THE IMF MUST\nHAVE ADEQUATE RESOURCES TO FULFILL ITS CRITICAL ROLE.\nWE WILL CONTINUE TO WORK WITH OTHER MEMBERS, IN THE\nHOPE OF REACHING A DECISION ON QUOTAS BY THE END OF THE\nYEAR. THE UNITED STATES HAS ALWAYS SUPPORTED THE IMF\nAND WILL CONTINUE TO DO so.\nWE ALL LOOK TO THE WORLD BANK TO HELP BUILD THE\nFOUNDATION FOR A FUTURE GLOBAL PROSPERITY THAT REACHES\nALL PEOPLES. ITS EFFORTS TO PROMOTE STRUCTURAL REFORM\nAND DEVELOPMENT ARE CRUCIAL TO RESOLVING DEBT PROBLEMS.\nTHE BANK'S DECISIONS TO TAKE ON NEW RESPONSIBILITIES ON\nTHE DEBT FRONT ARE WELCOME.\n- 11 -\nALSO, TO ADDRESS THE SIGNIFICANT PROBLEMS OF THE\nPOOREST COUNTRIES, THE INTERNATIONAL DEVELOPMENT\nASSOCIATION WAS ESTABLISHED AND WILL CONTINUE TO HAVE\nTHE SUPPORT OF THE UNITED STATES.\nWE HAVE ALSO LEARNED, AS I EMPHASIZED MONDAY AT\nTHE U.N., AND LAST SUMMER AT THE PARIS SUMMIT, THAT\nENVIRONMENTAL DESTRUCTION KNOWS NO BORDERS.\nTO MAKE GROWTH TRULY SUSTAINABLE, WE MUST WEIGH\nENVIRONMENTAL CONSIDERATIONS MORE HEAVILY AS WE MAKE\nECONOMIC DECISIONS. WE MUST ALSO FIND WAYS TO\nSTRENGTHEN OUR ENVIRONMENTAL AND DEVELOPMENTAL EFFORTS,\nTHROUGH INNOVATIVE THINKING SUCH AS \"DEBT FOR NATURE\"\nTRANSACTIONS.\n- 12 -\nOVER THE YEARS -- AS WE'VE COME TO UNDERSTAND THE\nEFFECT OF ENVIRONMENTAL DESTRUCTION ON THE LONG-TERM\nGROWTH OF DEVELOPING COUNTRIES -- THE WORLD BANK HAS\nINCREASED THE PRIORITY IT ASSIGNS TO ENVIRONMENTAL\nCONCERNS. WE APPLAUD THOSE EFFORTS. BUT THERE IS MORE\nTO BE DONE. WE NEED TO WORK MORE COOPERATIVELY TO\nDEVELOP CONSTRUCTIVE SOLUTIONS TO GLOBAL WARMING,\nINCLUDING MEASURES TO PROMOTE ENERGY EFFICIENCY AND\nCONSERVATION AND GREATER PROTECTION OF FOREST\nRESOURCES.\nIN ADDRESSING THE CHALLENGES OF THE 1980'S, WE\nHAVE COME TO A DEEPER UNDERSTANDING OF THE IMPORTANCE\nOF COOPERATING AS A COMMUNITY OF NATIONS TO ADDRESS\nCOMMON PROBLEMS.\n- 13 -\nI CAN THINK OF NO BETTER CURRENT EXAMPLE THAN THE\nNEED TO WORK TOGETHER TO DEAL WITH INTERNATIONAL DRUG\nTRAFFICKING AND MONEY LAUNDERING. IT IS A WORLDWIDE\nPROBLEM. DRUG MONEY UNDERMINES HONEST BUSINESSES,\nCORRUPTS POLITICAL INSTITUTIONS, AND EVEN THREATENS THE\nSECURITY OF NATIONS. TO CONCEAL THEIR OBSCENE PROFITS,\nDRUG BARONS MUST WASH THEIR MONEY BY CYCLING IT THROUGH\nFINANCIAL INSTITUTIONS AND ILLEGITIMATE SHELL\nCORPORATIONS.\nTHE UNITED STATES RENEWS ITS CALL UPON ALL\nCOUNTRIES TO RATIFY THE UNITED NATIONS VIENNA\nCONVENTION, AND MAKE MONEY LAUNDERING A CRIMINAL AND\nEXTRADITABLE OFFENSE. WE NEED TOUGH MEASURES TO TRACK\nDOWN AND CONFISCATE THE PROFITS OF DRUG-RELATED CRIME.\nI AM ENCOURAGED BY THE G-7 DEMOCRACIES' INTEREST\nIN A COORDINATED RESPONSE TO THE MONEY LAUNDERING\nMENACE. I URGE EVERYONE TO JOIN WITH US TO EXPLORE NEW\nWAYS TO STOP MONEY LAUNDERING IN ITS TRACKS.\n- 14 -\nAND THERE MAY BE NO GREATER OPPORTUNITY BEFORE US\nALL TODAY THAN THE CHALLENGE OF POLAND AND MORE BROADLY\nEASTERN EUROPE -- WHERE COUNTRIES ARE IN THE THROES OF\nDRAMATIC POLITICAL AND ECONOMIC CHANGE.\nTHE UNITED STATES AND ITS INTERNATIONAL PARTNERS\nHAVE ALREADY UNDERTAKEN NEW INITIATIVES TOWARD POLAND.\nBUT NOW, IN LIGHT OF CLEARLY GROWING NEEDS, THE RECENT\nACCESSION OF A SOLIDARITY-LED GOVERNMENT, AND OUR SELF-\nEVIDENT STAKE IN ITS SUCCESS, WE MUST DO MORE. WE\nUNDERSTAND THE POLISH GOVERNMENT HAS UNDER\nCONSIDERATION A BOLD PLAN FOR ECONOMIC RECOVERY.\nI CALL ON THE I.M.F. AND THE WORLD BANK TO WORK\nRAPIDLY WITH POLAND TO DEVELOP SUCH A PROGRAM AND\nENSURE ITS SUCCESSFUL IMPLEMENTATION. FOR ITS PART,\nTHE UNITED STATES INTENDS TO BE OUT IN FRONT OF THIS\nEFFORT, TO TAKE ADVANTAGE OF THIS HISTORIC DEVELOPMENT\nAND TO ENSURE ITS SUCCESS.\n- 15 -\nTODAY OUR MUTUAL EFFORTS TO IMPROVE GLOBAL GROWTH,\nTO EASE THE BURDENS OF DEVELOPING COUNTRY INDEBTEDNESS,\nAND TO OPEN UP MARKETS FOR TRADE, HAVE DEMONSTRATED\nANEW THAT PROGRESS IS BEST ACHIEVED BY FACING PRESSING\nISSUES TOGETHER.\nTHIS IS A LESSON WE MUST CARRY WITH US INTO THE\n1990'S IF WE ARE TO PASS ON TO FUTURE GENERATIONS A\nGLOBAL ECONOMY THAT IS STRONG AND RESILIENT, AND ABLE\nTO PROVIDE FOR THE ASPIRATIONS OF THE CITIZENS OF ALL\nOUR COUNTRIES.\nTHANK YOU FOR YOUR HARD WORK, YOUR SERVICE, YOUR\nCOMMITMENT. GOD BLESS YOU AND THE NATIONS YOU\nREPRESENT.\n#\n#\n#\nTHE WHITE HOUSE\nWASHINGTON\nSeptember 25, 1989\nINFORMATION\nMEMORANDUM FOR THE PRESIDENT\nTHROUGH:\nCHRISS WINSTON cw\nFROM:\nEDWARD McNALLY NW\nSUBJECT:\nREMARKS FOR THE WORLD BANK/IMF ANNUAL MEETING\nI. SUMMARY\nAttached for your consideration and review are draft\nremarks for Wednesday morning's address to the annual meeting of\nthe World Bank and the International Monetary Fund.\nII. DISCUSSION\nAt 9:35 a.m. on Wednesday, September 27, 1989, you are\nscheduled to arrive at the Sheraton Washington Hotel to address\nthe annual meeting of the World Bank and the International\nMonetary Fund.\nYou will be introduced by Treasury Secretary Nicholas\nBrady. An audience of approximately 3,500 international bankers\nis expected to attend.\nThe attached remarks were originally developed in a\ndraft prepared by the Treasury Department, after being re-worked\nhere by Stephen Farrar, Associate Director for International\nEconomic Policy in Roger Porter's Office. The remarks emphasize\nyour belief in the power of free markets and free choices to\nbring about national prosperity for any country, offer your\nsupport for the Brady Plan for debt relief, and underscore your\ncommitment to safeguarding the environment even while promoting\neconomic development abroad.\nMcNally/Simon\nSeptember 25, 1989 7:30 pm\nDraft Four (B:IMF)\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nWASHINGTON, D.C.\nWEDNESDAY, SEPTEMBER 27, 1989\n9:35 a.m.\nThank you. And thanks especially to my good friend Nick\nBrady, for those warm words, and for his outstanding economic\nleadership -- both at home, and abroad. [[PAUSE]]\nChairman Lee [[TYU KYU SUNG LEE, CHAIRMAN, WORLD BANK BOARD\nOF GOVERNORS] 1, President Conable [[BARBER CONABLE, WORLD BANK\nPRESIDENT] Mr. Camdessus [[KAHM-deh-SOOS]] [[MICHEL CAMDESSUS,\nIMF MANAGING DIRECTOR]].\nIt is a pleasure for me to be here this morning, and to\nwelcome you to Washington.\nAnd it is a special privilege for me to be here in the\ncompany of my old friend, Barber Conable.\nAlmost 20 years ago, when Barber sat next to me in the House\nWays and Means Committee, we had a bet about who would be first\nto become President. [[PAUSE]] We never said, \"President of\nwhat\" -- so now Barber claims he beat me by two years. [[PAUSE]]\nRemember the reaction when Barber was named bank president?\nThe headlines all said: \"BARBARA WHO?\" [[PAUSE]] That's okay.\nUntil this year, the same thing happened all the time to Barbara\nBush. [PAUSE]]\nWe in the United States are keenly aware of the importance\nof these annual gatherings, and we are proud that we can be your\n2\nhosts, as we have been for over 40 years since these institutions\nwere created. We regard these meetings as key events -- events\nthat drive the work of all of us in maintaining a strong\ninternational economic and financial system.\nThis is my first opportunity to speak to you as President.\nBut I have followed the activities of the International Monetary\nFund and the World Bank throughout my years of public service. I\nhave visited many of your homelands, and seen first-hand the\nproblems created by inadequate growth and development -- problems\nthat your two distinguished institutions are working to solve.\nBut today, we're here to talk not about problems -- but\nabout solutions.\nWe have witnessed a dramatic shift over the past few years\nin the debate over how to achieve sustained growth and\ndevelopment.\nAnd although not a banker, you should know that I do have a\ndegree in economics. It taught me one simple lesson: When\nyou're standing in front of the world's greatest concentration of\nfinancial genius -- don't talk about economics. [[PAUSE]]\nLet's talk instead about FREEDOM.\nAll across the world, there has been an almost simultaneous\nrediscovery of the power created when individuals are given the\nfreedom to decide -- the freedom to act in their own best\ninterests.\nTrue, we're here today mainly to discuss economic freedom.\nBut make no mistake. In the end, both economic freedom -- and\n)\n3\npolitical freedom -- are essential and inseparable companions on\nthe road to national prosperity.\nThe jury is no longer out. Take any one people, give them\ntwo sets of rules, and see who prospers and who struggles. Since\nWorld War II, we have seen two Germanys, [two Chinas], and two\nKoreas. It's been almost 50 years. Let's put an end to this\neconomic experiment. VV Because history has decided.\n[[PAUSE]]\nIt is not climate, natural resources, or cultural traditions\nthat make the difference. I said it in my inaugural address:\n\"We know what works: Freedom works. We know what's right:\nFreedom is right. We know how to secure a more just and\nprosperous life for man on Earth: through free markets, free\nspeech, free elections, and the exercise of free will unhampered\nby the state.\" [[PAUSE]]\nIn Latin America, Africa, and elsewhere, courageous leaders\nare turning away from state control of their economies. Through\neconomic restructuring and deregulation, they are opening the\ndoor to private initiative. And already they are seeing results.\nIn Mexico, for example, sound economic policies adopted by\nthe Salinas government -- coupled with their recent agreement\nwith creditor banks -- are leading to a increased capital and\nforeign investment, and reduced domestic interest rates.\nEven more stunning is the transformation in thinking in the\ncommunist countries -- not only in the Soviet Union, but in\nEastern Europe.\n4\nOur recent travels among the people of Poland and Hungary\nled to many dramatic and stirring encounters. But almost as much\nas we were impressed by the people, we were impressed by the\nalmost universal acceptance of the free market as the best hope\n-- indeed, the only hope -- for reversing the economic fortunes\nof these two proud countries.\nThe rediscovery of these basic truths in the East has been\nmatched by a recommitment to them in the West. Today the members\nof the European Community are dedicated to eliminating internal\nbarriers to economic activity by the end of 1992. And, Europe's\nleaders assure me that this will not be at the cost of new\nexternal barriers to trade with the E.C.\nThe Peruvian economist, Hernando de Soto, has helped us\nunderstand this worldwide phenomenon by documenting the process\nin Latin America.\nDe Soto was raised in Peru, and educated there and in\nEurope, where he lived until 1979. But the chronic privation of\nhis homeland haunted him. Rather than analyzing flow-charts or\nofficial statistics for the answer, he began walking the streets\nof Lima.\nHe found that the poor of Latin America -- who have never\nread Jefferson or Adam Smith -- ran their affairs democratically,\noutside the formal economy, organizing their private, parallel\neconomy in a free and unregulated manner.\nDe Soto's great contribution has been to point out what, in\nretrospect, may seem obvious: People everywhere want the same\n5\nthings. And when left alone by government, people everywhere\norganize their lives in remarkably similar ways.\nDe Soto's prescription offers a clear and promising\nalternative to economic stagnation in Latin America and other\nparts of the world. Governments must bring the \"informal\"\nworkers into the regular economy -- and then get out of the way,\nand let individual enterprise flourish.\nThe wider application of these principles within our\neconomies is critical to achieving the stronger, more prosperous,\nglobal economy of tomorrow.\nWe each must do our part. The industrial countries have a\nspecial responsibility. We must coordinate economic policies to\nhelp provide sustained growth with low inflation, reduced trade\nimbalances, and greater stability in exchange markets.\nWe in the United States are working especially hard to\nreduce the federal budget deficit, and to increase our national\nsavings rate.\nAll our nations have a responsibility to ensure a fair and\nopen trading system. We have a tremendous opportunity to advance\nthat cause now, by making a success of the Uruguay Round of trade\nnegotiations.\nMaking the political commitments necessary to ensure a\nsuccess will not be easy in any of our countries. But it must be\ndone. We must strengthen the GATT, and allow our markets to open\nin a mutual, step-by-step fashion.\n6\nAs we seek to extend and expand growth in the world economy,\nthe debt problems faced by developing countries are central to\nthe agendas of the IMF and the World Bank. Over the past year,\nthe international community's strengthened approach to these\nproblems has provided new hope for debtor nations.\nAmerica's Secretary of the Treasury, my good friend Nick\nBrady, has helped direct the focus on debt reduction as a\ncomplement to continued new lending -- bringing developing\nnations and commercial banks back to where they belong: the\nnegotiating table.\nQuick action by both the IMF and the World Bank has given\nthis new strategy vital support. By making clear the terms under\nwhich they will support the reduction of debt burdens -- and by\nworking with countries to develop the necessary economic reform\nprograms -- these institutions have made it possible to reduce\ndebt burdens and provide a solid foundation for growth.\nThanks to these initiatives, Mexico reached an agreement in\nJuly with its creditor banks. The deal enabled Mexico to make\nenormous progress in reducing its debt burden. It also helped\nrestore confidence in the Mexican economy which has already\nresulted in a return of flight capital and new foreign\ninvestment.\nThis agreement underscores the benefits other debtor\ncountries stand to realize from this approach. Mexico's savings\nfrom this package will free resources for productive use in the\neconomy, leading to increased investment and improved growth.\n7\nWhat Mexico has done is not a miracle. It is a product of\nhard work and sustained commitment.\nThe strengthened debt strategy is flexible enough to address\nthe unique needs of each country. But the strategy will not work\nwithout sound economic policies in debtor countries.\nInefficient, unrealistic, and growth-stifling policies must\ngo. Benefits are available to a broad range of other countries\nthat pursue economic reforms. Several are now actively engaged\nwith the IMF and World Bank, and with the banking community --\nCosta Rica, Venezuela, Poland, and Morocco, to name a few.\nCommercial banks have a special role in making this process\nwork. It is important that the banks follow through on efforts\nmade with Mexico and the Philippines, and broaden their efforts\nwith other countries.\nWe encourage these efforts not as self-sacrifice -- but as\nself-interest. True, success not only will help the debtor\nnations. But it will also strengthen the banks, by putting their\nportfolios on a sounder footing.\nOne of the lessons of the 1980's, especially the debt\ncrisis, is that we're all in this together. And when we\ncooperate, we all come out winners.\nThe IMF and the World Bank are at the crossroads of our\ncooperative efforts. They are distinct institutions, even though\ntheir work is complementary and their objectives often overlap.\nThe IMF must continue to foster the sound economic policies\nnecessary for sustained growth. As part of that responsibility,\n8\nthe Fund has assumed an important and welcome role in the\nstrengthened debt strategy.\nThe United States recognizes that the IMF must have adequate\nresources to fulfill its critical role. We will continue to work\nwith other members, in the hope of reaching a decision on quotas\nby the end of the year. The United States has always supported\nthe IMF and will continue to do so.\nWe all look to the World Bank to help build the foundation\nfor a future global prosperity that reaches all our citizens.\nIts efforts to promote structural reform and development are\ncrucial to resolving debt problems. The Bank's decisions to take\non new responsibilities on the debt front are welcome.\nIn order to address the significant problems of the poorest\ncountries, the international community established the\nInternational Development Association (IDA) within the Bank as a\nmeans of providing concessional resources to those countries.\nI.D.A. will continue to have the support of the United States as\nit has had in the past.\nWe have also learned, as I emphasized Monday at the U.N.,\nand last summer at the Paris Summit, that environmental\ndestruction knows no borders.\n[The twin problems of crushing debt levels and a\ndeteriorating environment threaten not only the development, but\neven the stability of our neighbors in Latin America, Africa,\nparts of Asia and even Europe. And global warming and rapid\ndeforestation pose a threat to all humankind.]\n9\nWe face unprecedented problems. We need -- and we can find\n-- unprecedented solutions.\nTo make growth truly sustainable, we must weigh\nenvironmental considerations more heavily as we make economic\ndecisions. We must also find ways to strengthen our\nenvironmental and developmental efforts, through innovative\nthinking such as \"debt for nature transactions.\"\nBecause with leadership, problems can become opportunities.\nOver the years -- as we've come to understand the crippling\neffects environmental destruction can have on the long-term\ngrowth of developing countries -- the World Bank has increased\nthe priority it assigns to environmental concerns. We applaud\nthe efforts made thus far. But there is more to be done. In\nparticular, we need to work more cooperatively to develop\nconstructive solutions to global warming, including measures to\npromote energy efficiency and conservation and greater protection\nof forest resources.\nIn addressing the challenges of the 1980's, we have come to\na deeper understanding of the importance of cooperating as a\ncommunity of nations to address common problems.\nI can think of no better current example than the need to\nwork together to deal with international drug trafficking and\nmoney laundering. It is a worldwide problem. Drug money\nundermines honest businesses, corrupts political institutions,\nand even threatens the security of nations. To conceal their\nobscene profits, drug barons must wash their money by cycling it\n10\nthrough financial institutions and illegitimate shell\ncorporations.\nThe United States renews its call upon all countries to\nratify the United Nations Vienna Convention, and make money\nlaundering a criminal and extraditable offense. We need tough\nmeasures to track down and confiscate the profits of drug-related\ncrime.\nI was encouraged at the 1989 Economic Summit, when the G-7\nindustrial democracies demonstrated an active interest in a\ncoordinated response to the money laundering menace. My country\nwill host next year's summit, and I guarantee that the United\nStates will be pushing for further progress and bold action. I\nurge everyone to join with us to explore new ways to stop money\nlaundering in its tracks.\nThis, too, is a matter of returning to basic truths. More\nthan thirty years ago, President Eisenhower spoke to this group\nabout his experiences in wartime. He recalled working with\ngroups that had to develop real cooperation among themselves --\nor there could be no success.\nIke noted, as I do now, that there were people in the\naudience who were our allies in that grand effort. He said:\n\"We early found one thing: without the heart, without the\nenthusiasm for the cause in which we were working, no cooperation\nwas possible. With that enthusiasm, subordinating all else to\nthe advancement of the cause, cooperation was easy.\"\n11\nToday our mutual efforts to improve global growth, to ease\nthe burdens of developing country indebtedness, and to open up\nmarkets for trade, have demonstrated anew that progress is best\nachieved by facing pressing issues together.\nThis is a lesson we must carry with us into the 1990's if we\nare to pass on to future generations a global economy that is\nstrong and resilient, and able to provide for the aspirations of\nthe citizens of all our countries.\nThank you for your hard work, your service, your commitment.\nAnd thank you for coming to Washington. Godspeed you in your\nefforts here, and God bless you and the nations you represent.\n#\n#\n#\nMcNally/Simon\nSeptember 25, 1989 7:30 pm\nDraft Four (B:IMF)\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nWASHINGTON, D.C.\nWEDNESDAY, SEPTEMBER 27, 1989\n9:35 A.M.\nThank you. And thanks especially to my good friend Nick\nBrady, for those warm words, and for his outstanding economic\nleadership -- both at home, and abroad. [[PAUSE]]\nChairman Lee [[TYU KYU SUNG LEE, CHAIRMAN, WORLD BANK BOARD\nOF GOVERNORS] President Conable [[BARBER CONABLE, WORLD BANK\nPRESIDENT] Mr. Camdessus [[KAHM-deh-SOOS]] [MICHEL CAMDESSUS,\nIMF MANAGING DIRECTOR]].\nIt is a pleasure for me to be here this morning, and to\nwelcome you to Washington.\nAnd it is a special privilege for me to be here in the\ncompany of my old friend, Barber Conable.\nAlmost 20 years ago, when Barber sat next to me in the House\nWays and Means Committee, we had a bet about who would be first\nto become President. [[PAUSE]] We never said, \"President of\nwhat\" -- so now Barber claims he beat me by two years. [[PAUSE]]\nRemember the reaction when Barber was named bank president?\nThe headlines all said: \"BARBARA WHO?\" [[PAUSE] That's okay.\nUntil this year, the same thing happened all the time to Barbara\nBush. [[PAUSE]]\nWe in the United States are keenly aware of the importance\nof these annual gatherings, and we are proud that we can be your\n2\nhosts, as we have been for over 40 years since these institutions\nwere created. We regard these meetings as key events -- events\nthat drive the work of all of us in maintaining a strong\ninternational economic and financial system.\nThis is my first opportunity to speak to you as President.\nBut I have followed the activities of the International Monetary\nFund and the World Bank throughout my years of public service. I\nhave visited many of your homelands, and seen first-hand the\nproblems created by inadequate growth and development -- problems\nthat your two distinguished institutions are working to solve.\nBut today, we're here to talk not about problems -- but\nabout solutions.\nWe have witnessed a dramatic shift over the past few years\nin the debate over how to achieve sustained growth and\ndevelopment.\nAnd although I am not a banker, you should know that I do\nhave a degree in economics. It taught me one simple lesson:\nWhen you're standing in front of the world's greatest\nconcentration of financial genius -- don't talk about economics.\n[[PAUSE]]\nLet's talk instead about FREEDOM.\nAll across the world, there has been an almost simultaneous\nrediscovery of the power created when individuals are given the\nfreedom to decide -- the freedom to act in their own best\ninterests.\n3\nTrue, we're here today mainly to discuss economic freedom.\nBut make no mistake. In the end, both economic freedom -- and\npolitical freedom -- are essential and inseparable companions on\nthe road to national prosperity.\nThe jury is no longer out. Look at the two economic systems\nand see who has prospered and who has struggled. Let's put\nan end to this economic experiment. VV Because history has\ndecided. [[PAUSE]]\nIt is not climate, natural resources, or cultural traditions\nthat make the difference. I said it in my inaugural address:\n\"We know what works: Freedom works. We know what's right:\nFreedom is right. We know how to secure a more just and\nprosperous life for man on Earth: through free markets, free\nspeech, free elections, and the exercise of free will unhampered\nby the state.\" [[PAUSE]]\nIn Latin America, Africa, and elsewhere, courageous leaders\nare turning away from state control of their economies. Through\neconomic restructuring and deregulation, they are opening the\ndoor to private initiative. And already they are seeing results.\nIn Mexico, for example, sound economic policies adopted by\nthe Salinas government -- coupled with their recent agreement\nwith creditor banks -- are leading to increased capital and\nforeign investment, and reduced domestic interest rates.\nEven more stunning is the transformation in thinking in the\ncommunist countries -- not only in the Soviet Union, but in\nEastern Europe.\n4\nOur recent travels among the people of Poland and Hungary\nled to many dramatic and stirring encounters. But almost as much\nas we were impressed by the people, we were impressed by the\nalmost universal acceptance of the free market as the best hope\n-- indeed, the only hope -- for reversing the economic fortunes\nof these two proud countries.\nThe rediscovery of these basic truths in the East has been\nmatched by a recommitment to them in the West. Today the members\nof the European Community are dedicated to eliminating internal\nbarriers to economic activity by the end of 1992. And, Europe's\nleaders assure me that this will not be at the cost of new\nexternal barriers to trade with the E.C.\nThe Peruvian economist, Hernando de Soto, has helped us\nunderstand this worldwide phenomenon by documenting the process\nin Latin America.\nDe Soto was raised in Peru, and educated there and in\nEurope, where he lived until 1979. But the chronic privation of\nhis homeland haunted him. Rather than analyzing flow-charts or\nofficial statistics for the answer, he began walking the streets\nof Lima.\nHe found that the poor of Latin America -- who have never\nread Jefferson or Adam Smith -- ran their affairs democratically,\noutside the formal economy, organizing their private, parallel\neconomy in a free and unregulated manner.\nDe Soto's great contribution has been to point out what, in\nretrospect, may seem obvious: People everywhere want the same\n5\nthings. And when left alone by government, people everywhere\norganize their lives in remarkably similar ways.\nDe Soto's prescription offers a clear and promising\nalternative to economic stagnation in Latin America and other\nparts of the world. Governments must bring the \"informal\"\nworkers into the regular economy -- and then get out of the way,\nand let individual enterprise flourish.\nThe wider application of these principles within our\neconomies is critical to achieving the stronger, more prosperous,\nglobal economy of tomorrow.\nWe each must do our part. The industrial countries have a\nspecial responsibility. We must coordinate economic policies to\nhelp provide sustained growth with low inflation, reduced trade\nimbalances, and greater stability in exchange markets.\nWe in the United States are working especially hard to\nreduce the federal budget deficit, and to increase our national\nsavings rate.\nAll our nations have a responsibility to ensure a fair and\nopen trading system. We have a tremendous opportunity to advance\nthat cause now, by making a success of the Uruguay Round of trade\nnegotiations.\nMaking the political commitments necessary to ensure a\nsuccess will not be easy in any of our countries. But it must be\ndone. We must strengthen the GATT, and allow our markets to open\nin a mutual, step-by-step fashion.\n6\nAs we seek to extend and expand growth in the world economy,\nthe debt problems faced by developing countries are central to\nthe agendas of the IMF and the World Bank. Over the past year,\nthe international community's strengthened approach to these\nproblems has provided new hope for debtor nations.\nAmerica's Secretary of the Treasury, my good friend Nick\nBrady, has helped direct the focus on debt reduction as a\ncomplement to continued new lending -- bringing developing\nnations and commercial banks back to where they belong: the\nnegotiating table.\nQuick action by both the IMF and the World Bank has given\nthis new strategy vital support. By making clear the terms under\nwhich they will support the reduction of debt burdens -- and by\nworking with countries to develop the necessary economic reform\nprograms -- these institutions have made it possible to reduce\ndebt burdens and provide a solid foundation for growth.\nThanks to these initiatives, Mexico reached an agreement in\nJuly with its creditor banks. The deal enabled Mexico to make\nenormous progress in reducing its debt burden. It also helped\nrestore confidence in the Mexican economy which has already\nresulted in a return of flight capital and new foreign\ninvestment.\nThis agreement underscores the benefits other debtor\ncountries stand to realize from this approach. Mexico's savings\nfrom this package will free resources for productive use in the\neconomy, leading to increased investment and improved growth.\n7\nWhat Mexico has done is not a miracle. It is a product of\nhard work and sustained commitment.\nThe strengthened debt strategy is flexible enough to address\nthe unique needs of each country. But the strategy will not work\nwithout sound economic policies in debtor countries.\nInefficient, unrealistic, and growth-stifling policies must\ngo. Benefits are available to a broad range of other countries\nthat pursue economic reforms. Several are now actively engaged\nwith the IMF and World Bank, and with the banking community --\nCosta Rica, Venezuela, Totand, and Morocco, to name a few.\nCommercial banks have a special role in making this process\nwork. It is important that the banks follow through on efforts\nmade with Mexico and the Philippines, and broaden their efforts\nwith other countries.\nWe encourage these efforts not as self-sacrifice -- but as\nself-interest. True, success not only will help the debtor\nnations. But it will also strengthen the banks, by putting their\nportfolios on a sounder footing.\nOne of the lessons of the 1980's, especially the debt\ncrisis, is that we're all in this together. And when we\ncooperate, we all come out winners.\nThe IMF and the World Bank are at the crossroads of our\ncooperative efforts. They are distinct institutions, even though\ntheir work is complementary and their objectives often overlap.\nThe IMF must continue to foster the sound economic policies\nnecessary for sustained growth. As part of that responsibility,\n8\nthe Fund has assumed an important and welcome role in the\nstrengthened debt strategy.\nThe United States recognizes that the IMF must have adequate\nresources to fulfill its critical role. We will continue to work\nwith other members, in the hope of reaching a decision on quotas\nby the end of the year. The United States has always supported\nthe IMF and will continue to do SO.\nWe all look to the World Bank to help build the foundation\nfor a future global prosperity that reaches all our citizens.\nIts efforts to promote structural reform and development are\ncrucial to resolving debt problems. The Bank's decisions to take\non new responsibilities on the debt front are welcome.\nIn order to address the significant problems of the poorest\ncountries, the international community established the\nInternational Development Association (IDA) within the Bank as a\nmeans of providing concessional resources to those countries.\nI.D.A. will continue to have the support of the United States as\nit has had in the past.\nWe have also learned, as I emphasized Monday at the U.N.,\nand last summer at the Paris Summit, that environmental\ndestruction knows no borders.\nThe twin problems of crushing debt levels and a\ndeteriorating environment threaten the development of our\nneighbors in Latin America, Africa, parts of Asia and even\nEurope. And global warming and rapid deforestation pose a threat\nto all humankind.\n9\nWe face unprecedented problems. We need -- and we can find\n-- unprecedented solutions.\nTo make growth truly sustainable, we must weigh\nenvironmental considerations more heavily as we make economic\ndecisions. We must also find ways to strengthen our\nenvironmental and developmental efforts, through innovative\nthinking such as \"debt for nature transactions.\"\nOver the years -- as we've come to understand the crippling\neffects environmental destruction can have on the long-term\ngrowth of developing countries -- the World Bank has increased\nthe priority it assigns to environmental concerns. We applaud\nthe efforts made thus far. But there is more to be done. In\nparticular, we need to work more cooperatively to develop\nconstructive solutions to global warming, including measures to\npromote energy efficiency and conservation and greater protection\nof forest resources.\nIn addressing the challenges of the 1980's, we have come to\na deeper understanding of the importance of cooperating as a\ncommunity of nations to address common problems.\nI can think of no better current example than the need to\nwork together to deal with international drug trafficking and\nmoney laundering. It is a worldwide problem. Drug money\nundermines honest businesses, corrupts political institutions,\nand even threatens the security of nations. To conceal their\nobscene profits, drug barons must wash their money by cycling it\n10\nthrough financial institutions and illegitimate shell\ncorporations.\nThe United States renews its call upon all countries to\nratify the United Nations Vienna Convention, and make money\nlaundering a criminal and extraditable offense. We need tough\nmeasures to track down and confiscate the profits of drug-related\ncrime.\nI was encouraged at the 1989 Economic Summit, when the G-7\nindustrial democracies demonstrated an active interest in a\ncoordinated response to the money laundering menace. My country\nwill host next year's summit, and I guarantee that the United\nStates will be pushing for further progress and bold action. I\nurge everyone to join with us to explore new ways to stop money\nlaundering in its tracks.\nmsent Poland\nThis, too, is a matter of returning to basic truths More\nthan thirty years ago, President Eisenhower spoke to this group\nabout his experiences in wartime. He recalled working with\ngroups that had to develop real cooperation among themselves --\nor there could be no success.\nIke noted, as I do now, that there were people in the\naudience who were our allies in that grand effort. He said:\n\"We early found one thing: without the heart, without the\nenthusiasm for the cause in which we were working, no cooperation\nwas possible. With that enthusiasm, subordinating all else to\nthe advancement of the cause, cooperation was easy. \"\n11\nToday our mutual efforts to improve global growth, to ease\nthe burdens of developing country indebtedness, and to open up\nmarkets for trade, have demonstrated anew that progress is best\nachieved by facing pressing issues together.\nThis is a lesson we must carry with us into the 1990's if we\nare to pass on to future generations a global economy that is\nstrong and resilient, and able to provide for the aspirations of\nthe citizens of all our countries.\nThank you for your hard work, your service, your commitment.\nAnd thank you for coming to Washington. Godspeed you in your\nefforts here, and God bless you and the nations you represent.\n#\n#\n#\nDocument No. 015337\nWHITE HOUSE STAFFING MEMORANDUM\n9/26/89\nDATE:\nACTION/CONCURRENCE/COMMENT DUE BY:\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nSUBJECT:\nWASHINGTON, DC\nWEDNESDAY, SEPTEMBER 27, 1989\n(9/25 - draft four)\nACTION FYI\nACTION FYI\nVICE PRESIDENT\nMCCLURE\nSUNUNU\nNEWMAN\nSCOWCROFT\nPORTER\nDARMAN\nSTUDDERT\nBATES\nUNTERMEYER\nBREEDEN\nROGERS\nCARD\nPINKERTON\nBOSKIN\nCICCONI\nWINSTON\nDEMAREST\nFITZWATER\nGRAY\nHAGIN\nREMARKS:\nThe attached has been forwarded to the President.\nRESPONSE:\nJames W. Cicconi\nAssistant to the President\nand Deputy to the Chief of Staff\nExt. 2702\nTHE WHITE HOUSE\nWASHINGTON\n25 P8:\nSeptember 25, 1989\nINFORMATION\nMEMORANDUM FOR THE PRESIDENT\nTHROUGH:\nCHRISS WINSTON CW\nFROM:\nEDWARD McNALLY They\nSUBJECT:\nREMARKS FOR THE WORLD BANK/IMF ANNUAL MEETING\nI. SUMMARY\nAttached for your consideration and review are draft\nremarks for Wednesday morning's address to the annual meeting of\nthe World Bank and the International Monetary Fund.\nII. DISCUSSION\nAt 9:35 a.m. on Wednesday, September 27, 1989, you are\nscheduled to arrive at the Sheraton Washington Hotel to address\nthe annual meeting of the World Bank and the International\nMonetary Fund.\nYou will be introduced by Treasury Secretary Nicholas\nBrady. An audience of approximately 3,500 international bankers\nis expected to attend.\nThe attached remarks were originally developed in a\ndraft prepared by the Treasury Department, after being re-worked\nhere by Stephen Farrar, Associate Director for International\nEconomic Policy in Roger Porter's Office. The remarks emphasize\nyour belief in the power of free markets and free choices to\nbring about national prosperity for any country, offer your\nsupport for the Brady Plan for debt relief, and underscore your\ncommitment to safeguarding the environment even while promoting\neconomic development abroad.\nMcNally/Simon\nSeptember 25, 1989 7:30 pm\nDraft Four (B:IMF)\nPRESIDENTIAL REMARKS: WORLD BANK/IMF ANNUAL MEETING\nSHERATON WASHINGTON\nWASHINGTON, D.C.\nWEDNESDAY, SEPTEMBER 27, 1989\n9:35 A.M.\nThank you. And thanks especially to my good friend Nick\nBrady, for those warm words, and for his outstanding economic\nleadership -- both at home, and abroad. [[PAUSE]]\nChairman Lee [TYU KYU SUNG LEE, CHAIRMAN, WORLD BANK BOARD\nOF GOVERNORS] 1, President Conable [ [BARBER CONABLE, WORLD BANK\nPRESIDENT] Mr. Camdessus [[KAHM-deh-SOOs]] [[MICHEL CAMDESSUS,\nIMF MANAGING DIRECTOR]]\nIt is a pleasure for me to be here this morning, and to\nwelcome you to Washington.\nAnd it is a special privilege for me to be here in the\ncompany of my old friend, Barber Conable.\nAlmost 20 years ago, when Barber sat next to me in the House\nWays and Means Committee, we had a bet about who would be first\nto become President. [[PAUSE]] We never said, \"President of\nwhat\" -- so now Barber claims he beat me by two years. [[PAUSE]]\nRemember the reaction when Barber was named bank president?\nThe headlines all said: \"BARBARA WHO?\" [[PAUSE]] That's okay.\nUntil this year, the same thing happened all the time to Barbara\nBush. [[PAUSE]]\nWe in the United States are keenly aware of the importance\nof these annual gatherings, and we are proud that we can be your\n2\nhosts, as we have been for over 40 years since these institutions\nwere created. We regard these meetings as key events -- events\nthat drive the work of all of us in maintaining a strong\ninternational economic and financial system.\nThis is my first opportunity to speak to you as President.\nBut I have followed the activities of the International Monetary\nFund and the World Bank throughout my years of public service. I\nhave visited many of your homelands, and seen first-hand the\nproblems created by inadequate growth and development -- problems\nthat your two distinguished institutions are working to solve.\nBut today, we're here to talk not about problems -- but\nabout solutions.\nWe have witnessed a dramatic shift over the past few years\nin the debate over how to achieve sustained growth and\ndevelopment.\nAnd although I am not a banker, you should know that I do\nhave a degree in economics. It taught me one simple lesson:\nWhen you're standing in front of the world's greatest\nconcentration of financial genius -- don't talk about economics.\n[[PAUSE]]\nLet's talk instead about FREEDOM.\nAll across the world, there has been an almost simultaneous\nrediscovery of the power created when individuals are given the\nfreedom to decide -- the freedom to act in their own best\ninterests.\n3\nTrue, we're here today mainly to discuss economic freedom.\nBut make no mistake. In the end, both economic freedom -- and\npolitical freedom -- are essential and inseparable companions on\nthe road to national prosperity.\nThe jury is no longer out. Look at the two economic systems\nand see who has prospered and who has struggled. Let's put\nan end to this economic experiment. VV Because history has\ndecided. [[PAUSE]]\nIt is not climate, natural resources, or cultural traditions\nthat make the difference. I said it in my inaugural address:\n\"We know what works: Freedom works. We know what's right:\nFreedom is right. We know how to secure a more just and\nprosperous life for man on Earth: through free markets, free\nspeech, free elections, and the exercise of free will unhampered\nby the state.\" [[PAUSE]]\nIn Latin America, Africa, and elsewhere, courageous leaders\nare turning away from state control of their economies. Through\neconomic restructuring and deregulation, they are opening the\ndoor to private initiative. And already they are seeing results.\nIn Mexico, for example, sound economic policies adopted by\nthe Salinas government -- coupled with their recent agreement\nwith creditor banks -- are leading to increased capital and\nforeign investment, and reduced domestic interest rates.\nEven more stunning is the transformation in thinking in the\ncommunist countries -- not only in the Soviet Union, but in\nEastern Europe.\n4\nOur recent travels among the people of Poland and Hungary\nled to many dramatic and stirring encounters. But almost as much\nas we were impressed by the people, we were impressed by the\nalmost universal acceptance of the free market as the best hope\n-- indeed, the only hope -- for reversing the economic fortunes\nof these two proud countries.\nThe rediscovery of these basic truths in the East has been\nmatched by a recommitment to them in the West. Today the members\nof the European Community are dedicated to eliminating internal\nbarriers to economic activity by the end of 1992. And, Europe's\nleaders assure me that this will not be at the cost of new\nexternal barriers to trade with the E.C.\nThe Peruvian economist, Hernando de Soto, has helped us\nunderstand this worldwide phenomenon by documenting the process\nin Latin America.\nDe Soto was raised in Peru, and educated there and in\nEurope, where he lived until 1979. But the chronic privation of\nhis homeland haunted him. Rather than analyzing flow-charts or\nofficial statistics for the answer, he began walking the streets\nof Lima.\nHe found that the poor of Latin America -- who have never\nread Jefferson or Adam Smith -- ran their affairs democratically,\noutside the formal economy, organizing their private, parallel\neconomy in a free and unregulated manner.\nDe Soto's great contribution has been to point out what, in\nretrospect, may seem obvious: People everywhere want the same\n5\nthings. And when left alone by government, people everywhere\norganize their lives in remarkably similar ways.\nDe Soto's prescription offers a clear and promising\nalternative to economic stagnation in Latin America and other\nparts of the world. Governments must bring the \"informal\"\nworkers into the regular economy -- and then get out of the way,\nand let individual enterprise flourish.\nThe wider application of these principles within our\neconomies is critical to achieving the stronger, more prosperous,\nglobal economy of tomorrow.\nWe each must do our part. The industrial countries have a\nspecial responsibility. We must coordinate economic policies to\nhelp provide sustained growth with low inflation, reduced trade\nimbalances, and greater stability in exchange markets.\nWe in the United States are working especially hard to\nreduce the federal budget deficit, and to increase our national\nsavings rate.\nAll our nations have a responsibility to ensure a fair and\nopen trading system. We have a tremendous opportunity to advance\nthat cause now, by making a success of the Uruguay Round of trade\nnegotiations.\nMaking the political commitments necessary to ensure a\nsuccess will not be easy in any of our countries. But it must be\ndone. We must strengthen the GATT, and allow our markets to open\nin a mutual, step-by-step fashion.\n6\nAs we seek to extend and expand growth in the world economy,\nthe debt problems faced by developing countries are central to\nthe agendas of the IMF and the World Bank. Over the past year,\nthe international community's strengthened approach to these\nproblems has provided new hope for debtor nations.\nAmerica's Secretary of the Treasury, my good friend Nick\nBrady, has helped direct the focus on debt reduction as a\ncomplement to continued new lending -- bringing developing\nnations and commercial banks back to where they belong: the\nnegotiating table.\nQuick action by both the IMF and the World Bank has given\nthis new strategy vital support. By making clear the terms under\nwhich they will support the reduction of debt burdens -- and by\nworking with countries to develop the necessary economic reform\nprograms -- these institutions have made it possible to reduce\ndebt burdens and provide a solid foundation for growth.\nThanks to these initiatives, Mexico reached an agreement in\nJuly with its creditor banks. The deal enabled Mexico to make\nenormous progress in reducing its debt burden. It also helped\nrestore confidence in the Mexican economy which has already\nresulted in a return of flight capital and new foreign\ninvestment.\nThis agreement underscores the benefits other debtor\ncountries stand to realize from this approach. Mexico's savings\nfrom this package will free resources for productive use in the\neconomy, leading to increased investment and improved growth.\n7\nWhat Mexico has done is not a miracle. It is a product of\nhard work and sustained commitment.\nThe strengthened debt strategy is flexible enough to address\nthe unique needs of each country. But the strategy will not work\nwithout sound economic policies in debtor countries.\nInefficient, unrealistic, and growth-stifling policies must\ngo. Benefits are available to a broad range of other countries\nthat pursue economic reforms. Several are now actively engaged\nwith the IMF and World Bank, and with the banking community --\nCosta Rica, Venezuela, Poland, and Morocco, to name a few.\nCommercial banks have a special role in making this process\nwork. It is important that the banks follow through on efforts\nmade with Mexico and the Philippines, and broaden their efforts\nwith other countries.\nWe encourage these efforts not as self-sacrifice -- but as\nself-interest. True, success not only will help the debtor\nnations. But it will also strengthen the banks, by putting their\nportfolios on a sounder footing.\nOne of the lessons of the 1980's, especially the debt\ncrisis, is that we're all in this together. And when we\ncooperate, we all come out winners.\nThe IMF and the World Bank are at the crossroads of our\ncooperative efforts. They are distinct institutions, even though\ntheir work is complementary and their objectives often overlap.\nThe IMF must continue to foster the sound economic policies\nnecessary for sustained growth. As part of that responsibility,\n8\nthe Fund has assumed an important and welcome role in the\nstrengthened debt strategy.\nThe United States recognizes that the IMF must have adequate\nresources to fulfill its critical role. We will continue to work\nwith other members, in the hope of reaching a decision on quotas\nby the end of the year. The United States has always supported\nthe IMF and will continue to do so.\nWe all look to the World Bank to help build the foundation\nfor a future global prosperity that reaches all our citizens.\nIts efforts to promote structural reform and development are\ncrucial to resolving debt problems. The Bank's decisions to take\non new responsibilities on the debt front are welcome.\nIn order to address the significant problems of the poorest\ncountries, the international community established the\nInternational Development Association (IDA) within the Bank as a\nmeans of providing concessional resources to those countries.\nI.D.A. will continue to have the support of the United States as\nit has had in the past.\nWe have also learned, as I emphasized Monday at the U.N.,\nand last summer at the Paris Summit, that environmental\ndestruction knows no borders.\nThe twin problems of crushing debt levels and a\ndeteriorating environment threaten the development of our\nneighbors in Latin America, Africa, parts of Asia and even\nEurope. And global warming and rapid deforestation pose a threat\nto all humankind.\n9\nWe face unprecedented problems. We need -- and we can find\n-- unprecedented solutions.\nTo make growth truly sustainable, we must weigh\nenvironmental considerations more heavily as we make economic\ndecisions. We must also find ways to strengthen our\nenvironmental and developmental efforts, through innovative\nthinking such as \"debt for nature transactions.\"\nOver the years -- as we've come to understand the crippling\neffects environmental destruction can have on the long-term\ngrowth of developing countries -- the World Bank has increased\nthe priority it assigns to environmental concerns. We applaud\nthe efforts made thus far. But there is more to be done. In\nparticular, we need to work more cooperatively to develop\nconstructive solutions to global warming, including measures to\npromote energy efficiency and conservation and greater protection\nof forest resources.\nIn addressing the challenges of the 1980's, we have come to\na deeper understanding of the importance of cooperating as a\ncommunity of nations to address common problems.\nI can think of no better current example than the need to\nwork together to deal with international drug trafficking and\nmoney laundering. It is a worldwide problem. Drug money\nundermines honest businesses, corrupts political institutions,\nand even threatens the security of nations. To conceal their\nobscene profits, drug barons must wash their money by cycling it\n10\nthrough financial institutions and illegitimate shell\nUSE\ncorporations.\nThe United States renews its call upon all countries to\nratify the United Nations Vienna Convention, and make money\nlaundering a criminal and extraditable offense. We need tough\nmeasures to track down and confiscate the profits of drug-related\ncrime.\nI was encouraged at the 1989 Economic Summit, when the G-7\nindustrial democracies demonstrated an active interest in a\ncoordinated response to the money laundering menace. My country\nwill host next year's summit, and I guarantee that the United\nStates will be pushing for further progress and bold action. I\nurge everyone to join with us to explore new ways to stop money\nlaundering in its tracks.\nThis, too, is a matter of returning to basic truths. More\nthan thirty years ago, President Eisenhower spoke to this group\nabout his experiences in wartime. He recalled working with\ngroups that had to develop real cooperation among themselves --\nor there could be no success.\nIke noted, as I do now, that there were people in the\naudience who were our allies in that grand effort. He said:\n\"We early found one thing: without the heart, without the\nenthusiasm for the cause in which we were working, no cooperation\nwas possible. With that enthusiasm, subordinating all else to\nthe advancement of the cause, cooperation was easy.\"\n11\nToday our mutual efforts to improve global growth, to ease\nthe burdens of developing country indebtedness, and to open up\nmarkets for trade, have demonstrated anew that progress is best\nachieved by facing pressing issues together.\nThis is a lesson we must carry with us into the 1990's if we\nare to pass on to future generations a global economy that is\nstrong and resilient, and able to provide for the aspirations of\nthe citizens of all our countries.\nThank you for your hard work, your service, your commitment.\nAnd thank you for coming to Washington. Godspeed you in your\nefforts here, and God bless you and the nations you represent.\n#\n#\n#"
}