By Jim Lobe
WASHINGTON, Nov 14 1997 (IPS)

The U.S. Congress, in a major blow to Washington’s international engagement, Thursday stripped from its 1998 foreign aid bill some 900 million dollars it owes the United Nations and a 3.5 billion-dollar pledge to help the International Monetary Fund (IMF) cope with global currency crises.

The administration of President Bill Clinton immediately denounced the move to renege on the U.N. dues as especially ill- timed, given Washington’s current face-off against Iraq at the UN Security Council.

“It is utterly bone-headed for Congress to fail to meet the commitments that the United States has at the United Nations in terms of our arrears,” said White House spokesman Mike McCurry.

At the same time, Treasury Secretary Robert Rubin huddled with lawmakers in hopes that the IMF money, which was committed to a new fund that is set to play a critical role in dealing with the ongoing East Asian financial crisis, could be salvaged.

“In numerical terms, the U.S. contribution is not that important,” said Bejoy Das Gupta, a senior economist at the Institute of International Finance here. “But (the Congress move) sends a political signal to East Asia that is certain to affect U.S. interests there,” he added. Most of the money was already earmarked for the 38-billion-dollar Indonesian bail-out.

The deletion of the funds from the foreign aid budget was engineered by anti-abortion forces in the Republican-dominated Congress and sent officials scrambling to Capitol Hill to work out some way of restoring them in another bill before Congress recesses for the year Friday.

Congressional sources, howevber, said there was virtually no possibility they would succeed. Some even suggested that the White House was playing a cynical game by going along with the cuts and then protesting them publicly.

“This is domestic politics,” said one source, who added that the White House had undercut Rubin and Secretary of State Madeleine Albright. “This White House doesn’t really give a damn about the U.N. or the IMF.”

The 1998 13.1-billion-dollar aid bill, while about one billion dollars higher than 1997 levels, fell far short of Clinton’s original request of more than 16 billion dollars.

The biggest winners, as usual, were Israel and Egypt, which together are set to receive more than five billion dollars. Congress also approved Clinton’s request for more than one billion dollars for the International Development Association, the World Bank affiliate which provides no-interest loans to the world’s poorest countries. The action clears up long-standing US arrears to the agency.

Separate versions of the bill were approved by the House of Representatives and the Senate several months ago, but a final compromise version was held up for months – as it has been for three years running – by differences over Washington’s population programme.

The Republican right has long insisted that Clinton reinstate the so-called ‘Mexico City’ policy first imposed by the administration of former president Ronald Reagan in the mid-1980s. That policy denied all U.S. population aid to non-governmental organisations who use or advocate the use of abortion, even if they do so with their own money.

Led by New Jersey Rep. Chris Smith, the anti-abortion forces enjoy a majority in the House of Representatives, while Clinton has long vowed to veto any legislation which reinstates the Mexico City policy. Although Republicans hold a majority in the Senate, the upper body has generally backed Clinton on the issue.

In last-minute negotiations Wednesday, the Republican leadership in both houses went along with Clinton’s demand that Mexico City be stripped from the 1998 aid bill. But the price was exceptionally high. In return, Republicans demanded that total population spending for fiscal 1998, which actually began Oct 1, be capped at 1997 levels of 385 million dollars, instead of the 425 million dollars requested by Clinton.

In addition, Clinton’s chief lobbyist, John Hilley, approved stripping the bill of more than 900 million dollars Washington owes the UN for past dues, the 3.5-billion-dollar IMF commitment, and a hard-fought State Department re-organisation plan that, ironically, was sponsored by the ultra-right chairman of the Senate Foreign Relations Committee, Jesse Helms.

In return, the House Republican leadership reportedly promised to bring up a separate measure that would include all of the deletions, including Smith’s Mexico City policy, Thursday afternoon. “But that was just a figleaf,” said a Congressional source, who added that the White House knew that such a measure had no hope of passage.

Such a measure “would have included the Mexico City policy,” he said, “and that would never have been accepted by the Senate and Clinton. So the whole idea was just for show.”

The loss of the U.N. arrears is especially serious, because the world body is verging on bankruptcy. “We were counting on a payment of the US arrears to keep us afloat,” said Fred Eckhard, the U.N’s chief spokesman in New York. “This just makes a bad situation worse.”

The world body actually is owed more than 2.4 billion dollars in unpaid assessments – of which it says Washington owes nearly 1.5 billion dollars, or approximately 60 percent.

If Congress had approved the request, which had been tortuously worked out between Helms and the administration, Washington would have paid 100 million dollars of arrears in 1998, 475 million dollars in 1999, and 244 million dollars in 2000. Under the proposal, payments were to be made conditional on the adoption of specific reforms by the world body, including a reduction in U.S. dues.

On Wednesday, the UN General Assembly approved the first of a series of US-backed administrative reforms proposed by Secretary- General Kofi Annan. “Hopefully, the success of reform will mean the US Congress will finally give us our money to pay the arrears,” Annan said after the vote.

Many analysts here now believe that the arrears payment plan is unlikely to be revived next year because it is an election year, and because Washington’s partners at the UN are unlikely to go along with a reduction in its dues without the Congress having already appropriated the money. “I don’t think it has a prayer next year,” said one senior U.N. official who tracks Capitol Hill.

Pro-population groups praised the decision to strip the bill of the Mexico City proposal but noted the costs. “They exacted a heavy price by threatening this country’s role in the United Nations and the international financial system and its ability to conduct a coherent foreign policy,” said Victoria Markell, director of Population Action International.

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