The United States won a pledge of prompt action Tuesday on its Third World debt-reduction program from the two most powerful lending agencies, the International Monetary Fund and the World Bank.
On the final day of the two organizations' spring session, their steering committee said moving forward with the proposal was "a matter of urgency."However, a key element of the plan authored by Treasury Secretary Nicolas Brady was not endorsed by the steering committee. The finance ministers agreed only to examine further a proposal for reducing interest rate payments.
The Brady approach marks a major change in past administration policy by placing more emphasis on debt foregiveness.
The $1.3 trillion Third World debt burden has crippled the economies of the developing nations and sparked economic and political unrest in many emerging democracies in Latin America. Riots left at least 270 dead in Venezuela last month after the government announced a new austerity program to please the creditors that hold the nation's $33 billion debt.
Under the plan, commercial banks that have lent money to debtor nations would be encouraged to cancel voluntarily or reduce part of the loans, or cut the interest charges.