NSDD 96 United States Approach to the International Debt Problem

CUNFIDENTIAL System II 90596 THE WHITE HOUSE WASHINGTON CONFIDENTIAL NATIONAL SECURITY DECISION June 9, 1983 DIRECTIVE NUMBER 96 U.S. APPROACH TO THE INTERNATIONAL DEBT PROBLEM (C) The Senior Interdepartmental Group on International Economic Policy has conducted a review of the U.S. approach to the international debt problem and has reported the results of its review in a memorandum, Approach to the International Debt Problem Overview, dated April 25, 1983. This directive approves the approach outlined in that memorandum and provides implementing instructions. (C) Orderly resolution of the international debt situation is of major importance to U.S. economic, financial, foreign policy and security interests. Successful management of the debt problem will require flexible responses, tailored to the circumstances of the individual cases that comprise the problem at an international level, in the framework of a comprehensive strategy having the following principal ele- ments : (C) O Economic adjustment by borrowing countries designed to stabilize their economies and restore sustainable external positions. (C) o An International Monetary Fund adequately equipped to help borrowers design adjustment programs and provide balance of payments financing on a temporary basis while adjustment programs take effect. (C) O Readiness of monetary authorities in creditor countries to provide short-term liquidity support, when essential to assist selected borrowers that are formulating adjustment programs with the IMF. (C) O Encouragement to private markets to provide prudent levels of financing to borrowing countries in the process of implementing IMF-supported adjustment programs. (C) Resumption of sustainable, non-inflationary economic expansion and maintenance of open markets, both in the industrial countries and in developing countries facing debt problems. (C) CONF IDENTIAL DECLASSIFY ON: OADR CONFIDENTIAL COPY / OF 12 COPIES