THE WHITE HOUSE
Office of the Press Secretary
|For Immediate Release|| ||October 2, 1998|
REMARKS BY THE PRESIDENT
The South Portico
10:00 A.M. EDT
THE PRESIDENT: Good morning. Today I would like totalk to you about the steps we are taking to keep our economy growingby keeping the world's economy growing. Less than 36 hours ago,America closed the books on an era of exploding deficits anddiminished expectations by recording a budget surplus of $70 billion,the largest on record and the largest as a percentage of our economysince the 1950s. Every American should be proud of this.
Today, we received more evidence that the economyremains solid. For fifteen months in a row now, unemployment hasstayed below five percent for the first time in 28 years. Over thelast year, wages have risen at more than twice the rate of inflation,and now the economy has added more than 16.7 million new jobs since
Today, America enjoys a great moment of prosperity. Butwe cannot remain an oasis of prosperity in a world in which so muchof our growth depends upon trade and in which so many of our tradingpartners are experiencing economic turmoil. We must hold to theeconomic strategy that has brought us to where we are today and moveaggressively to deal with the challenges around the world. We mustmaintain our fiscal discipline. When I supported targeted tax cutsthat we paid for in this budget, I made it clear and I want to makeit clear again: I will veto any tax plan that drains the newsurplus. We simply have to set aside every penny of it, not only toset a good financial example around the world, but to save SocialSecurity first.
Second, we must continue to invest in education. Thefiscal year has just ended; yet, Congress still has not found time tosend me an appropriations bill on education. Congress must putprogress ahead of partisanship and send me an education bill thatfunds our investments in smaller classes, 100,000 new teachers,better trained, and safe, more modern schools, with every class ableto be hooked to the Internet by the year 2000.
To ensure prosperity for the American economy, I sayagain, however, we must continue to lead and we must move moreaggressively to lead in the global economy. Today, the world facesthe most serious financial challenge in 50 years. Our futureprosperity depends upon whether we can work with others to restoreconfidence, to manage change and to stabilize the financial system.Our chief priority is and must be economic growth -- here and aroundthe world.
Last month in New York, I outlined several steps we cantake immediately to address the crisis. I asked Secretary Rubin andFederal Reserve Chairman Greenspan to convene a major meeting oftheir counterparts to recommend ways to adapt international financialinstitutions to the 21st Century. Yesterday, Secretary Rubin spokeabout that, and I am pleased that, on short notice, Secretary Rubinand Chairman Greenspan have arranged a meeting of finance ministersand central bankers from the major industrialized nations and the keyemerging markets for next Monday here in Washington. I willpersonally participate in their deliberations. The following day, Iwill address the World Bank and the International Monetary Fund tounderscore the urgency of quick action and the need for long-termreform of the international financial system.
But we must do more to help the international communityrespond to the challenges posed by the current crisis. And today weare taking the following steps -- steps that build on the approach Ioutlined a few weeks ago at the Council on Foreign Relations.
First, we must act to strengthen the internationalfinancial community's capacity to limit the contagion. This week,Secretary Rubin and Chairman Greenspan will explore with theInternational Monetary Fund and their G-7 colleagues whether best todesign a new mechanism, anchored in the IMF, to provide contingentfinance to help countries to ward off global financial contagion.This step, combined with full funding for the IMF, would give theinternational community a powerful new tool to help reduce the riskposed by the current financial crisis.
Second, we must help the people who have been hurt bythis crisis. As I said in New York, multilateral development bankslike World Bank, the Asian Development Bank, the Inter-AmericanDevelopment Bank have played a critical and positive role. Today, Iask them to explore the following steps to develop a new emergencycapacity to lend quickly so as to help other countries reform theirfinancial sectors while also helping the most vulnerable citizens, touse loan guarantees and other innovative means to leverage privatesector lending to emerging markets and to expand their own lending asmuch as possible within their guidelines to countries now affected bythe crisis who desperately need an infusion of new cash.
Finally, the United States will take new steps toencourage American businesses to continue exporting to and investingin emerging markets hurt by the crisis. Jim Harmon, the head of ourExport-Import Bank, will travel to Brazil, Argentina and Mexico overthis month. I have asked him to establish new short-term creditfacilities to make it easier for American businesses to continueexporting to critical Latin American markets. He will coordinatethese efforts with his counterparts in other leading industrialnations to ensure that trade credit continues to flow during thisperiod of financial stress. That is very, very important to oureconomy.
The Overseas Private Investment Corporation, OPIC, hasdeveloped a new instrument to help emerging economies raise moneyfrom international capital markets. That also is very important.Now, with these steps, we are acting to protect our own prosperityand to exercise responsible economic stewardship in the world. Butwe cannot act alone. Congress must take some responsibility as well.In the few working days it has left this year, the most importantthing Congress can do to protect our farmers, our ranchers, ourbusinesses and our workers is to secure full funding for theInternational Monetary Fund. Congress cannot afford to delayapproving IMF funding another day. Every day Congress delays,increases our vulnerability to crisis, decreases confidence in globalmarkets and undermines our prospects.
Without giving the IMF the resources it needs, manyvital efforts to strengthen the international financial institutionssimply will fall short. We can have an honest debate about the bestways to put out the economic fires abroad, but there should be nodoubt about whether we give the fire department the resources to dothe job. If America is to continue to grow, we must support the IMF.If America is to continue to grow, we must lead. We cannot lead ifwe won't even pay our fair share to the International Monetary Fund.I have been asking for this for nearly a year now. The crisisoverseas has continued to intensify. This is inexcusable and we needthe money now; for Americans and their interests and for thelong-term stability of the world, this is terribly, terriblyimportant.
We have done our best to manage this crisis, to mobilizeother countries. We want other countries to do more. We are notgoing to be able to get them to do more if we won't even do what isplainly our responsibility. No other country in the world hasbenefited as much as we have in the last six years from the globaleconomy. We can lead back away from this financial precipice, but weneed the resources to do it.
Now, let me say to all of you: Remember where we weresix years ago. There were some people who were saying America was indecline. Today, we have a new surplus. We have wages rising tohighest levels in over 20 years. We have the confidence in thecountry soaring. We have an unprecedented opportunity to build forthe future. But with all this turmoil in the rest of the world, wealso have a heavy responsibility to the future. We know that a lotof our growth has come because others were growing in the rest of theworld and could buy American products and American services. We knowwe are going into an unprecedented time. This country has got tolead. We've got to be aggressive. We have got to stay on the ballsof our feet. We've got to be aware that this thing is changing everyday.
We can help a great deal to modify the difficulties, tomove the world back toward growth, and to keep our own prosperitygoing. But if we're going to do that, we've got to lead, we've gotto do our part. We can't talk about these things and not put up ourshare of the investment. So, again, I say we're going to do what wecan. I'm looking very much forward to the IMF and the World Bankmeeting,. I'm looking forward to meeting with finance leaders andthe central bankers of these 22 countries. We're going to come upwith some good ideas, but ideas have to be followed by action. Andfor us to take the action we need to take, the Congress has got toprovide funds for the IMF. Thank you very much.
Q How close are we to a recession? Is there a dangerof recession in this world?
THE PRESIDENT: Well, I think the proper answer to that,Sam, is that about a quarter of the world is and has been inrecession. About a quarter of the world is in a period of very lowgrowth. The rest of us are growing. But in the nature of things, ifyou want growth to continue, you have to restore growth in that partof the world that's suffering now; and it cannot be done withoutaggressive action -- as I said in New York a couple of weeks ago-- aggressive action to restore the stability of the world financialsystem, to restore the confidence of investors, and to deal with thelegitimate problems within each country that many of those countrieshave to deal with that we can't do anything about.
But there are three things we've got to do. We've gotto do what we can to restore stability of the world financial system,we've got to restore the confidence of investors so they'll put theirmoney back in to markets everywhere, and we've got to work with thesecountries to solve the problems within the countries that only theycan solve. But the answer to your question is, we don't have to havea worldwide recession if those of us that enjoy growth will take theinitiative and move now.
But we cannot afford to dally around here. If we'd hadthis six months ago, we could have done more than we have. So Ithink it's important that everybody recognize that we don't know --nobody can predict the future with great certainty, but I have a lotof confidence in the strength of the American economy and our abilityto keep doing well, but it rests in large measure on our ability todo the right thing around the world.
But keep in mind, 30 percent of our growth in the lastsix years has come from our ability to sell our goods and servicesaround the world. We have a personal, vested interest quite apartfrom our larger ethical responsibilities to lead the world that we'veprofited so much from; we've got a vested interest in averting aglobal financial slowdown by taking initiatives and doing it now.We've got to do it now.
Q On Kosovo, should the world be surprised that theSerbs believed that they could possibly get away with massivebloodletting once again in the region without fearing action from theUnited States and in particular its European allies?
THE PRESIDENT: Well, that's the argument I've beenmaking for months, that we have seen, we saw in Bosnia what works indealing with Mr. Milosevic. And the Kosovo situation is somewhatsituation in that Kosovo is actually a part of Serbia, although bylaw, it's supposed to be autonomous. But let me tell you what we'redoing. Let's focus on what we're doing. We have been working formonths and months -- I have personally been working for months, firstof all, to get NATO and then to get the U.N. to send a message to Mr.Milosevic to stop the violence.
We have NATO working, we have the U.N. resolution. Ibelieve that our allies in Europe are with us, and I think that weall understand and we hope he got the message. I think it is veryimportant. We have to be very, very strong here. We need to stopthe violence, get a negotiated settlement and work our way throughthis. We don't want thousands upon thousands of people to be caughtup in a war or to starve or freeze this winter because they have beendisplaced, and we are working very, very hard on it and we'rebriefing on the Hill as well.
I want to say a special word of appreciation to SenatorDole, who has been very outspoken about this, very supportive aboutan aggressive role for the United States, very understanding that wecannot allow this conflict to spread again and risk what we stoppedin Bosnia, starting again in Kosovo. So we're working on it veryhard and I'm quite hopeful that we'll have a positive resolution ofit. Thank you.