America and other parts of the world. Governments must bring the "informal" workers into the regular economy and then get out of the way and let individual enterprise flourish. We each must do our part. And yes, the industrial countries have a special responsibility. We must coordinate economic policies to help provide sustained growth with low inflation, reduced trade imbalances, and greater stability in exchange markets. We in the United States are working especially hard to reduce our own Federal budget deficit and to increase our national savings rate. All our nations have a responsibility to ensure a fair and open trading system. And we have a tremendous opportunity to advance that cause now, by making success of this all-important Uruguay round of trade negotiations. Making the political commitments necessary to ensure a success-look, they will not be easy, but we must strengthen the GATT [General Agreement on Tariffs and Trade] and allow our markets to open in a mutual, step-by-step fashion. As we seek to extend and expand growth in the world economy, the debt problems faced by developing countries are central to the agendas of the IMF and the World Bank. Over the past year, the international community's strengthened approach to these problems has truly provided new hope for the debtor nations. America's Secretary of the Treasury, Nick Brady, has helped direct the focus on debt reduction as a complement to continued new lending-bringing developing nations and commercial banks back to where they belong: back to the negotiating table. Quick action by both the IMF and the World Bank has given this new strategy vital support. By making clear the terms under which they will support the reduction of debt burdens and by working with countries to develop the necessary economic reform programs, these institutions have made it possible to reduce debt burdens and provide a solid foundation for growth. Thanks to these initiatives, Mexico reached an agreement with its creditor banks enabling Mexico to make enormous progress in reducing its debt burden. It also helped restore-almost instantly-restore confidence in the Mexican economy. And it's already resulted in a return of capital and new foreign investment. This agreement underscores the benefits other debtor countries stand to realize from this approach. Mexico's savings from this package will free resources for productive use in the economy, leading to increased investment, leading to improved growth. What Mexico has done is not a miracle; it's a product of hard work and sustained commitment. The strengthened debt strategy is flexible enough to address the unique needs of each country. But the strategy will not work without sound economic policies in the debtor countries. Inefficient, unrealistic, growth-stifling policies simply must go. Ben efits are available to a broad range of other countries that pursue economic reforms. Several are now actively engaged, I'm told, with the IMF and World Bank, and with the banking community itself. Commercial banks have a special role in making this follow process work. And they must through on efforts made with Mexico and the Philippines, and broaden their efforts with other countries. We encourage these steps not as self-sacrifice but self-interest. True, success not only will help the debtor nations. But it will also strengthen the banks, by putting their own portfolios on a sounder basis. One of the lessons of the 1980's, especially the debt crisis, is that we're all in this together. And when we cooperate, we all come out winners. The IMF and the World Bank are at the crossroads of our cooperative efforts. The IMF must continue to foster the sound economic policies necessary for sustained growth. As part of that responsibility, the Fund has assumed an important and very welcome role in the strengthened debt strategy. The United States recognizes that the IMF must have adequate resources to fulfill its critical role. And we will continue to work with other members in the hope of reaching a decision on the quota questionon quotas by the end of the year. The United States has always supported the IMF, and we will continue to do so. We'll all look to the World Bank to help build the foundation for a future global prosperity that reaches all peoples. Its efforts to promote structural reform and development are absolutely crucial to resolving debt problems. The Bank's decisions to take on new responsibilities on the debt front are very welcome. Also, to address the significant problems of the poorest countries, the International Development Association, IDA, was established and will continue to have the support of the United States. We have also learned, as I emphasized Monday at the United Nations and last summer at the Paris summit, that environmental destruction knows no borders. To make growth truly sustainable, we must weigh environmental considerations more heavily as we make economic decisions. And we must also find ways to strengthen our environmental and development efforts through innovative thinking, such as the "debt for nature transactions." Over the years, as we've come to understand the effect of environmental destruction on the long-term growth of developing countries, the World Bank has increased the priority it assigns to environmental concerns. We applaud those efforts. But there is more to be done. We need to work more cooperatively to develop constructive solutions to global warming, including measures to promote energy efficiency and conservation and greater protection of forest resources. In addressing the challenges of the 1980's, we have come to a deeper understanding of the importance of cooperating as a community of nations to address common problems. I can think of no better current example than the need to work together to deal with international drug trafficking and money laundering. It is a worldwide problem. Drug money undermines honest businesses, corrupts political institutions, and even threatens the security of nations. To conceal their obscene profits, drug barons must wash their money by cycling it through financial institutions and illegitimate shell corporations. The United States renews its call upon all countries to ratify the United Nations Vienna Convention, and make money laundering a criminal and extraditable offense. We need tough measures to crack down and track down and confiscate the profits of drug-related crime. I am encouraged by the G-7 [Group of Seven] democracies interested in this co ordinated response to the money laundering menace. But I urge everyone to join with us to explore new ways to stop money laundering in its tracks. And there may be no greater opportunity before us-all of us-today than the challenge of Poland; and then on the broader landscape Eastern Europe, the entire Eastern Europe, where countries are in the throes of dramatic political and economic change. The United States and its international partners have already undertaken new initiatives toward Poland. But now, in the light of clearly growing needs, the recent accession of a Solidarity-led government, and our self-evident stake in its success, we must do more. We understand the Polish Government has under consideration a bold plan for economic recovery. And I call on the IMF and the World Bank to work rapidly with Poland to develop such a program and ensure its successful implementation. For its part, the United States intends to be out in front of this effort, to take advantage of this historic development and to ensure its success. Today our mutual efforts to improve global growth, to ease the burdens of developing countries-their indebtedness, and to open markets for trade have demonstrated anew that progress is best achieved by facing pressing issues together. This is a lesson that we must carry with us into the 1990's if we are to pass on to future generations a global economy that is strong and resilient and able to provide for the aspirations of the citizens of all our countries. Thank you very much for your hard work. Thank you for your service. Thank you for your commitment. God bless you and the nations that you represent. Thank you very much. Note: The President spoke at 9:32 a.m. in the ballroom at the Sheraton Washington Hotel. In his opening remarks, he referred to Kyu Sung Lee and Barber B. Conable, Chairman of the Board of Governors and President, respectively, of the International Bank for Reconstruction and Development; and International Monetary Fund Managing Director Michel Camdessus. Remarks on the Upcoming Education The President. Let me just say at the beginning-make a couple of comments on the summit, and then I'll be glad to take your questions. We've designed the format of the summit to encourage a candid and very free-flowing discussion. There's a lot of ideas that need to be exchanged, not only the Governors to the White House but vice versa, and between the Governors. So we've set it in a way that we will have a lot of interchange. I think we're going to establish the fact that we need measurable national goals. And this, I am told, most of the Governors agree on. They think they need time to finalize what these goals are, but this will be a rather significant step if there's agreement on that-we think we're going to get agreement on it. It will result in continued activities after the summit, consulting with the educators and business community, parents, all those elements in our society which have a significant stake in our educational system. And I think it's going to I think the process-what we hope is that it produces a strong consensus for achieving these national goals. I expect that we're going to find much agreement on the need both for greater flexibility in the use of Federal funds. I remember at the last Governors' meeting, Please do not mandate what we do. And at the same time, greater accountability. I think there's a strong recognition amongst the Governors that we need accountability for achieving results relating to the goals. I'm hopeful that we're going to come out of the summit with a commitment to restructure and to make those fundamental changes that are needed if we're going to improve educational performance. And as I said before, doing more of the same is unlikely to accomplish what we need. And so, the more we've talked to the Governorsthat I have and Roger Porter [Assistant to the President for Economic and Domestic Policy] and others on the staff have-the more convinced I am that they support this view. So, these are the broad objectives. I'm looking forward to it. I think it's the third time that a summit has been convened with Governors. I told a group the other day that I learned back a year or 2 years ago the importance of having the Governors involved because they, indeed, are the ones that-responsible for the State budgets and come up with so many of the new ideas. So I'm looking forward to this one. Arms Control and Nuclear Testing Q. Mr. President, speaking of summits, [Soviet Foreign Minister] Shevardnadze has said that a START [strategic arms reduction talks] treaty is very possible by the time of your summit with Gorbachev in spring or early summer. Do you agree with that assessment? The President. Yes, I do. And I think the setting of a summit perhaps will serve as a catalyst for moving forward. But it's not a given, it's not absolutely certain that that's what's going to happen. But I would agree that we have a good likelihood that might happen. Q. How about the The President. I don't want to set it up so that if we don't have every "t" crossed and "i" dotted, that the summit next spring or summer is considered a failure. But, yes, I'd have to agree with him. Q. And how about a moratorium on nuclear testing? Would you go for that? The President. Well, as long as we are dependent for a deterrence based on nuclear weapons, I would have difficulty eliminating all testing. We've made some progress on PNET, on Threshold Test Ban Treaty, but it's important that these weapons be safe, it's important they be sound. And so, we're perfectly prepared to discuss that, but I think we do have some differences on it if that is Mr. Gorbachev's position. Head Start Program Q. Mr. President, a question on the education summit. You've said repeatedly that more money is not the answer to America's school problems. But what about Head Start? Currently, there's only enough space for one out of five eligible poor children. Will you make a commitment to expand that program so that all disadvantaged chil dren can participate in Head Start in the 1990's? The President. We increased funding for Head Start, but we'll be talking about that at the summit. And I'm anxious to hear what the get from the Governors-not some statistic floating around up here—but from the Governors, what they say. We had a group of businessmen in here yesterday and then educators a few days. ago, and there was, Terry [Terry Hunt, Associated Press], there was a feeling that those early, early days in a kid's life, those formative days are very, very important, and that does mean pre-regular-school schooling of some sort. We're open-minded on the question. We're living within constrained resources. But this is a question I'm going to be asking the Governors what they think. What are they doing in the States in this pre-K, pre-kindergarten level? And how do we work with them? So I'm notdon't have a closed mind, but I'm not going in there accepting some figure by an organization here in Washington that commits me to a budget number. Q. Well, those groups you mentioned, educators and the businessmen, they both are advocating a big expansion in Head Start so that all the children The President. Oddly enough, they didn't there-well, they advocated an expansion and more people attending. I was interested that they felt this is something that ought to be discussed at the summit and the determination of how it's resolved be done there. And we'll try, we'll try. I'm not going down there saying we're going to, you know, quintuple spending when they've got these big fights going on right now thatfor me to live within the law of this land in terms of the budget. Assistance to Poland Q. Mr. President, in your speech to the IMF today, you said that the United States and its allies must do more to encourage reforms in Poland. Were you signaling by that additional unilateral U.S. assistance to Poland? The President. Well, we've stepped up on Poland, as you know. But I think the key thing now is the Poles themselves are working on a reform package. And we've had people over there-Bob Mosbacher [Secre tary of Commerce] was there, we've had some OPIC [Overseas Private Investment Corporation] people there, there's been some private missions there [former Reagan Chief of Staff] Howard Baker and [former Vice President] Mondale went over there. And I want to work with them in every way we can. But I think it's important that we see what their plan is of economic reform. Q. Well, their Finance Minister has talked about the need for an immediate $1 billion loan. Is that possible? The President. Well the EC [European Economic Community] is working on their side. We've been helpful on ours. And so we'll see what final figures are arrived at. But we had a long meeting with the Polish Foreign Minister, and I'm not saying he wouldn't welcome more money, but he made this point to me very clearly-a very interesting, very bright man-about the need for reform. So let's move apace, let's see what it is that is required in terms of reform and then we'll try to do everything we can. We are committed to the success of democracy in Poland, and certainly in Hungary. Capital Gains and Tax Reform Q. Mr. President, are you at all concerned, sir, that if you prevail, or even if the Democratic alternative prevails on capital gains, that it will open the floodgates to a familiar situation, which is the annual drilling of new loopholes in the Tax Code by Congress, sometimes with the aid of the administration and sometimes not? What are you going to do to preserve what remains of the integrity of the tax reform law that was passed just a couple of years ago if this initiative of yours succeeds? The President. I supported the tax reform law, but in last year's campaign there were one or two areas where I felt that we needed to use the tax system to achieve various ends. It became very clear that capital gains was, in my view, a job-creatingcapital gains differential was a job-creating mechanism. That issue has been distorted by those who try to maintain that it's a tax for the rich. They are wrong about that. It will help create jobs. It will help in savings. And I'll tell you another thing: A vote against our capital gains position tomorrow will be a vote for a tax increase. And I have great difficulty with that. And I have not changed my thinking on that. Q. What about the prospect, though, sir, that if this does pass, or even if the alternative passes, that the door has now been opened on a Tax Code that had been-from which these preferences had been removed to more of them? The President. I have confidence that [House Ways and Means Committee] Chairman Rostenkowski, with the help of the administration, would be able to resist an allout assault on the tax reform bill. Arms Control Q. Mr. President, you talked about a new attitude at the United Nations in your relations with the Soviet Union. How does that play out, sir, in connection with arms control negotiations and a resolution of regional conflicts? The President. Well, in some arms control negotiations, obviously, we're in a multilateral forum. The Vienna talks is one good example. In terms of the negotiations between the United States and the Soviet Union, there is today, as there has been in the last 40 years, keen interest in the United Nations on this question. But the way it will play out is at the U.N. itself-I think there is far less hostile rhetoric, far fewer polemical speeches at the U.N. where people have been made to choose sides. And so it's a much more productive environment in which to discuss their role in arms control-and I think of the U.N. Conference and things that go on—but also to discuss a lot of other issues. But I don't see a new role for the United Nations in hammering out a START treaty, helping hammer out a START treaty between the United States and the Soviets. Or having a role in the-as we try to go forward in chemical weapons with the Soviets in terms of what I called for on the Soviet side and the U.S. side. But there will be a role, could well be a role in trying to get other countries that possess chemical weapons, for example, to get rid of them, or certainly to stop proliferation. The U.N. has a vital role. Did I get your question? The President. I got the U.N. question mixed into your question. Look, I think that the spirit that prevailed in Wyoming is just one more manifestation that we don't have a disconnect with Mr. Gorbachev on SovietU.S. relations. And that spirit obviously makes it much easier to discuss contentious regional issues or arms control issues. There have been times, and I think everybody-you all know-when it was very difficult even to bring subjects up without getting a rhetorical diatribe on the question. And now you can talk about any subject very openly. And I think that is a very constructive development. And I would thank the Soviet leaders who are dialoguing with us in that manner. That isn't to say we don't have a few contentious subjects in which we have differences and will probably have strong differences for a long time. That's why I want to have a prudent defense policy. I don't want to do something naive or silly in defense just because we are working more closely with the Soviets today. We're not building our foreign policy on the success of any one individual or the failure of any one individual. We're building it on what is the best for the free world and the United States, and then we're striving mightily to make the Soviets understand that and to bring them along in constructive negotiation. And I am pleased. I was criticized-it wasn't so many days ago for timidity. I think the team I have here knows what it's doing. And I'm very proud of them all. And they work together, and we don't have to necessarily advertise every step that we're taking. And I think now the |