MEMBERSHIP OF I.M.F.

Press, Volume XCVIII, Issue 28888, 7 May 1959, Page 9

MEMBERSHIP OF I.M.F.

Comment By Mr W. Rosenberg

Mr W. Rosenberg, senior lecturer in economics at the University of Canterbury, author of a Canterbury Chamber of Commerce economic bulletin quoted yesterday in a leading article in “The Press,” has .written to the leditor as follows:

i “I am glad you are giving publicity to certain dangers of [an indiscriminate inflow of | foreign investment into New Zealand. May I go on record, however, that I do not see in joining the International Monetary Fund a solution to this problem. It is [a fundamental mistake to assume that the International Monetary Fund is a source of easy credit.

I “The fund will lend limited 1 amounts to such countries only i which supply a ‘declaration of i intent* indicating an outline of (financial policy acceptable to*the fund. If the policy of the fund—which can be enforced once counI tries start borrowing—can be j summarised it is to make countries ‘creditworthy risks for international investment.’ In other words, far from being an alternative to private foreign investment, the fund will put New Zealand’s economic policies under the shadow of unrestrained foreign investment.

“Such a policy may imply strong deflationary ingredients and cause unemployment. If one considers that the Midland Bank has granted New Zealand an overdraft of £lO million —as much and more than we could borrow at one go from the fund I —and this without any strings l attached, I cannot see anv advantages in joining the 1.M.F., I while I can see many dangers and i disadvantages.”