Bored with debt
FOR John Major, attending his first IMF, the experience has not been much fun. He came by way of Trinidad, where he un- veiled to the Commonwealth finance ministers his new plan for debt relief. Surprise, surprise — all the debtor coun- tries voted for it. He then flew to Washing- ton, where he took his Treasury team to see Shogun: the musical, an expensive spectacular about a lone Englishman sur- rounded by Japanese and seeking to bend them to his will. As the week has gone on, he will have known how this felt. On arrival he was greeted with the news that the pound had fallen out of bed, or had been kicked out by the Prime Minister. His team tried to put it back, helped by the knowledge that they had some half-way- respectable trade figures in reserve, and the Chancellor had to stand up and look inflexible. He is good at this. Trained in his years as a bank manager in the art of refusing overdrafts, he explains that he always said his policy would hurt and will do nothing to stop it hurting. No cuts in interest rates until he can be sure it is safe to make them. I dare say that certainty may come to him quite soon, because the British bankers here are in no doubt what is happening to their customers. Until lately they thought business was slowing down; now they think it has stopped. As for the Major Plan (which the Treasury has labelled The Trinidad Terms'), everyone has patted it on the head in an abstracted way, and in the end it will probably get somewhere and do good, which is more than can be said for most of the verbiage being generated here — but the worries it addresses are simply not at the top of anyone's list. Indeed, the oddest thing about this year's meetings is that they are bored with debt. We have had eight years of agonising since Mexico first stopped payment. Now Mexico is back in favour, and Brazil is playing its usual silly game with the IMF and the bankers — but who cares? The Latin Americans, who five years ago would swamp the meetings, have stayed at home. A creditor explains: they know that no one will lend them any more money, so why waste the air fares? In other circumstances that might be a good sign. Stalemate is, at least, one stage on from crisis. Now, though, the point is that the bankers have discovered new and more urgent worries, closer to home.
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