cause

America and other parts of the world. Gov- it's already resulted in a return of capital ernments must bring the “informal” work- and new foreign investment. This agreeers into the regular economy and then get ment underscores the benefits other debtor out of the way and let individual enterprise countries stand to realize from this apflourish.

proach. Mexico's savings from this package We each must do our part. And yes, the

will free resources for productive use in the industrial countries have a special responsi- economy, leading to increased investment, bility. We must coordinate economic poli- leading to improved growth. What Mexico cies to help provide sustained growth with has done is not a miracle; it's a product of low inflation, reduced trade imbalances, hard work and sustained commitment. and greater stability in exchange markets.

The strengthened debt strategy is flexible We in the United States are working espe, enough to address the unique needs of each cially hard to reduce our own Federal

country. But the strategy will not work budget deficit and to increase our national

without sound economic policies in the savings rate. All our nations have a responsi- debtor countries. Inefficient, unrealistic, bility to ensure a fair and open trading growth-stifling policies simply must go. Bensystem. And we have a tremendous oppor

efits are available to a broad range of other tunity to advance that

now, by making success of this all-important Uru

countries that pursue economic reforms.

Several are now actively engaged, I'm told, guay round of trade negotiations. Making the political commitments necessary to

with the IMF and World Bank, and with ensure a success-look, they will not be

the banking community itself. Commercial easy, but we must strengthen the GATT

banks have a special role in making this

process work. (General Agreement on Tariffs and Trade]

follow

And they must and allow our markets to open in a mutual,

through on efforts made with Mexico an step-by-step fashion.

the Philippines, and broaden their efforts As we seek to extend and expand growth

with other countries. in the world economy, the debt problems

We encourage these steps not as self-sacfaced by developing countries are central to

rifice but self-interest. True, success not the agendas of the IMF and the World

only will help the debtor nations. But it will Bank. Over the past year, the international

also strengthen the banks, by putting their community's strengthened approach to own portfolios on a sounder basis. One of these problems has truly provided new

the lessons of the 1980's, especially the debt hope for the debtor nations. America's Sec

crisis, is that we're all in this together. And retary of the Treasury, Nick Brady, has

when we cooperate, we all come out winhelped direct the focus on debt reduction

ners. The IMF and the World Bank are at as a complement to continued new lend

the crossroads of our cooperative efforts. ing-bringing developing nations and com

The IMF must continue to foster the sound mercial banks back to where they belong: economic policies necessary for sustained back to the negotiating table. Quick action growth. As part of that responsibility, the by both the IMF and the World Bank has

Fund has assumed an important and very given this new strategy vital support. By

welcome role in the strengthened debt making clear the terms under which they strategy. will support the reduction of debt burdens The United States recognizes that the and by working with countries to develop IMF must have adequate resources to fulfill the necessary economic reform programs, its critical role. And we will continue to these institutions have made it possible to work with other members in the hope of reduce debt burdens and provide a solid reaching a decision on the quota questionfoundation for growth.

on quotas by the end of the year. The Thanks to these initiatives, Mexico United States has always supported the reached an agreement with its creditor IMF, and we will continue to do so. We'll banks enabling Mexico to make enormous all look to the World Bank to help build the progress in reducing its debt burden. It also foundation for a future global prosperity helped restore-almost instantly-restore that reaches all peoples. Its efforts to proconfidence in the Mexican economy. And mote structural reform and development are absolutely crucial to resolving debt ordinated response to the money launderproblems. The Bank's decisions to take on ing menace. But I urge everyone to join new responsibilities on the debt front are with us to explore new ways to stop money very welcome. Also, to address the signifi- laundering in its tracks. cant problems of the poorest countries, the International Development Association,

And there may be no greater opportunity IDA, was established and will continue to

before us—all of us—today than the chalhave the support of the United States.

lenge of Poland; and then on the broader We have also learned, as I emphasized landscape Eastern Europe, the entire East

,

ern Europe, where countries are in the Monday at the United Nations and last

throes of dramatic political and economic summer at the Paris summit, that environmental destruction knows no borders. To

change. The United States and its internamake growth truly sustainable, we must

tional partners have already undertaken weigh environmental considerations more

new initiatives toward Poland. But now, in heavily as we make economic decisions.

the light of clearly growing needs, the And we must also find ways to strengthen

recent accession of a Solidarity-led governour environmental and development efforts

ment, and our self-evident stake in its sucthrough innovative thinking, such as the cess, we must do more. We understand the "debt for nature transactions.” Over the Polish Government has under consideration years, as we've come to understand the a bold plan for economic recovery. And I effect of environmental destruction on the call on the IMF and the World Bank to long-term growth of developing countries, work rapidly with Poland to develop such a the World Bank has increased the priority it program and ensure its successful impleassigns to environmental concerns. We ap- mentation. For its part, the United States plaud those efforts. But there is more to be intends to be out in front of this effort, to done. We need to work more cooperatively take advantage of this historic development to develop constructive solutions to global

and to ensure its success. warming, including measures to promote energy efficiency and conservation and Today our mutual efforts to improve greater protection of forest resources. global growth, to ease the burdens of develIn addressing the challenges of the

oping countries—their indebtedness, and to 1980's, we have come to a deeper under

open markets for trade have demonstrated standing of the importance of cooperating

anew that progress is best achieved by a community of nations to address

facing pressing issues together. This is a common problems. I can think of no better

lesson that we must carry with us into the current example than the need to work to

1990's if we are to pass on to future generagether to deal with international drug traf

tions a global economy that is strong and ficking and money laundering. It is a world

resilient and able to provide for the aspirawide problem. Drug money undermines

tions of the citizens of all our countries. honest businesses, corrupts political institu- Thank you very much for your hard work. tions, and even threatens the security of Thank you for your service. Thank you for nations. To conceal their obscene profits, your commitment. God bless you and the drug barons must wash their money by cy- nations that you represent. Thank you very cling it through financial institutions and il- much. legitimate shell corporations. The United States renews its call upon all countries to

Note: The President spoke at 9:32 a.m. in ratify the United Nations Vienna Conven

the ballroom at the Sheraton Washington tion, and make money laundering a crimi

Hotel. In his opening remarks, he referred nal and extraditable offense. We need tough

to Kyu Sung Lee and Barber B. Conable, measures to crack down and track down Chairman of the Board of Governors and and confiscate the profits of drug-related President, respectively, of the International crime.

Bank for Reconstruction and Development;

and International Monetary Fund ManagI am encouraged by the G-7 (Group of Seven) democracies interested in this co

ing Director Michel Camdessus.

as

a

Remarks on the Upcoming Education So, these are the broad objectives. I'm Summit and a Question-and-Answer looking forward to it. I think it's the third Session With Reporters

time that a summit has been convened with September 27, 1989

Governors. I told a group the other day that

I learned back a year or 2 years ago the The President. Let me just say at the be

importance of having the Governors inginning—make a couple of comments on

volved because they, indeed, are the ones the summit, and then I'll be glad to take that—responsible for the State budgets and your questions. We've designed the format come up with so many of the new ideas. So of the summit to encourage a candid and

I'm looking forward to this one. very free-flowing discussion. There's a lot of

Arms Control and Nuclear Testing ideas that need to be exchanged, not only the Governors to the White House but vice

Q. Mr. President, speaking of summits,

[Soviet Foreign Minister Shevardnadze has versa, and between the Governors. So

said that a START (strategic arms reduction we've set it in a way that we will have a lot

talks) treaty is very possible by the time of of interchange.

your summit with Gorbachev in spring or I think we're going to establish the fact

early summer. Do you agree with that asthat we need measurable national goals.

sessment? And this, I am told, most of the Governors

The President. Yes, I do. And I think the agree on. They think they need time to

setting of a summit perhaps will serve as a finalize what these goals are, but this will

catalyst for moving forward. But it's not a be a rather significant step if there's agree- given, it's not absolutely certain that that's ment on that—we think we're going to get

what's going to happen. But I would agree agreement on it. It will result in continued

that we have a good likelihood that might activities after the summit, consulting with happen. the educators and business community, par- Q. How about theents, all those elements in our society which

The President. I don't want to set it up so have a significant stake in our educational

that if we don't have every “t” crossed and system. And I think it's going to—I think

“i” dotted, that the summit next spring or the process—what we hope is that it pro

summer is considered a failure. But, yes, I'd duces a strong consensus for achieving have to agree with him. these national goals.

Q. And how about a moratorium on nuI expect that we're going to find much

clear testing? Would you go for that? agreement on the need both for greater The President. Well, as long as we are flexibility in the use of Federal funds. I re

dependent for a deterrence based on nuclemember at the last Governors' meeting,

ar weapons, I would have difficulty elimiPlease do not mandate what we do. And at

nating all testing. We've made the same time, greater accountability. I

progress on PNET, on Threshold Test Ban think there's a strong recognition amongst Treaty, but it's important that these weapthe Governors that we need accountability

ons be safe, it's important they be sound. for achieving results relating to the goals.

And so, we're perfectly prepared to discuss I'm hopeful that we're going to come out that, but I think we do have some differof the summit with a commitment to re- ences on it if that is Mr. Gorbachev's posistructure and to make those fundamental tion. changes that are needed if we're going to improve educational performance. And as I

Head Start Program said before, doing more of the same is un- Q. Mr. President, a question on the edulikely to accomplish what we need. And so, cation summit. You've said repeatedly that the more we've talked to the Governors- more money is not the answer to America's that I have and Roger Porter (Assistant to school problems. But what about Head the President for Economic and Domestic Start? Currently, there's only enough space Policy] and others on the staff have—the for one out of five eligible poor children. more convinced I am that they support this Will you make a commitment to expand view.

that program so that all disadvantaged chil

some some

dren can participate in Head Start in the tary of Commerce) was there, we've had 1990's?

some OPIC (Overseas Private Investment The President. We increased funding for Corporation] people there, there's been Head Start, but we'll be talking about that

private missions there former at the summit. And I'm anxious to hear Reagan Chief of Staff] Howard Baker and what the—get from the Governors—not (former Vice President] Mondale went over some statistic floating around up here—but there. And I want to work with them in from the Governors, what they say.

every way we can. But I think it's imporWe had a group of businessmen in here tant that we see what their plan is of ecoyesterday and then educators a few days nomic reform. ago, and there was, Terry (Terry Hunt, As

Q. Well, their Finance Minister has talked sociated Press), there was a feeling that

about the need for an immediate $1 billion those early, early days in a kid's life, those loan. Is that possible? formative days are very, very important, The President. Well the EC (European and that does mean pre-regular-school

Economic Community) is working on their schooling of some sort. We're open-minded

side. We've been helpful on ours. And so on the question. We're living within con

we'll see what final figures are arrived at. strained resources. But this is a question I'm

But we had a long meeting with the Polish going to be asking the Governors what they

Foreign Minister, and I'm not saying he think. What are they doing in the States in

wouldn't welcome more money, but he this pre-K, pre-kindergarten level? And

made this point to me very clearly—a very how do we work with them? So I'm notdon't have a closed mind, but I'm not going

interesting, very bright man—about the a

need for reform. So let's move apace, let's in there accepting some figure by an orga

see what it is that is required in terms of nization here in Washington that commits

reform and then we'll try to do everything me to a budget number.

we can. We are committed to the success of Q. Well, those groups you mentioned, educators and the businessmen, they both

democracy in Poland, and certainly in Hun

gary. are advocating a big expansion in Head Start so that all the children

Capital Gains and Tax Reform The President. Oddly enough, they didn't there-well, they advocated an expansion

Q. Mr. President, are you at all con

cerned, sir, that if you prevail, or even if and more people attending. I was interested that they felt this is something that

the Democratic alternative prevails on cap

ital gains, that it will open the floodgates to ought to be discussed at the summit and the determination of how it's resolved be done

a familiar situation, which is the annual there. And we'll try, we'll try. I'm not going

drilling of new loopholes in the Tax Code down there saying we're going to, you

by Congress, sometimes with the aid of the know, quintuple spending when they've got

administration and sometimes not? What these big fights going on right now that

are you going to do to preserve what refor me to live within the law of this land in

mains of the integrity of the tax reform law terms of the budget.

that was passed just a couple of years ago if

this initiative of yours succeeds? Assistance to Poland

The President. I supported the tax reform Q. Mr. President, in your speech to the law, but in last year's campaign there were IMF today, you said that the United States one or two areas where I felt that we and its allies must do more to encourage needed to use the tax system to achieve reforms in Poland. Were you signaling by various ends. It became very clear that capthat additional unilateral U.S. assistance to ital gains was, in my view, a job-creatingPoland?

capital gains differential was a job-creating The President. Well, we've stepped up on mechanism. That issue has been distorted Poland, as you know. But I think the key by those who try to maintain that it's a tax thing now is the Poles themselves are work- for the rich. They are wrong about that. It ing on a reform package. And we've had will help create jobs. It will help in vings. people over there-Bob Mosbacher (Secre- And I'll tell you another thing: A vote