Increased LM.F. Quotas Likely

Press, Volume CIII, Issue 30540, 8 September 1964, Page 15

Increased LM.F. Quotas Likely

(N.Z.P .A.-Reuter —Copyright)

TOKYO, September 7.

, International liquidity and ways of increasing the flow of capital to developing nations are expected to be the key questions at the joint annual meeting of governors of the International Monetary Fund and the World Bank, opening in Tokyo today. Ihe Finance Ministers, governors of central banks and their delegations are expected to agree on an increase of 25 per cent in International Monetary Fund Quotas as a provisional move to increase international liquidity*.

The LM.F.’s annual report and a recent Ministerial statement by the “group of ten”—the world’s leading industrial nations—proposed a general and moderate increase in quotas.

The managing-director of the LM.F. (Mr Pierre-Paul Schweitzer), who is expected to give strong support to the idea in his opening speech today, said on Friday that 25 per cent would be a “reasonably good guess” for the rate the governors are likely to agree on.

More than 1900 delegates from 102 countries are assembling in Tokyo for the five-day conference, the biggest ever held in Japan. Two affiliates of the W o r 1 d Bank—the International Finance Corporation and the International Development Association—will also be holding their annual meetings. Mr Schweitzer is also expected to call for study of longer-term, more radical measures to ensure adequate international liquidity as the United States payments deficits progressively cease to contribute to the creation of international reserves. Delegates from developing nations are expected to urge that the problem should not be left to the group of 10 alone. Afro-Asian spokesmen said they would stress the importance of solving the problem through international bodies, like the 1.M.F., in which they had a voice. Delegates from developing countries are also expected to

contribute to discussions on a proposal to make more funds available to the I.F.C. which lends money on easy terms and without Government guarantees to private industry in less-developed nations. The delegates are expected to agree to amend the articles of agreement of the World Bank and its affiliate to allow the bank to lend to the I.F.C. for relending purposes. The developing countries represented in Tokyo are also expected to renew their proposals, made at the recent United Nations trade and development conference in Geneva, for increased purchases of their primary products by the industrial leaders of the world. ANNUAL REPORTS The joint procedures committee of the conference met last night to prepare for today’s opening meeting. After a recess in the afternoon for informal discussions among delegates, the conference will meet again tomorrow to discuss the annual reports of the four bodies. Mr Harold Holt, the Australian Treasurer, and Mr H. R. Lake, the New Zealand Minister of Finance, are leading the delegations from their countries.