N.Z. Part At Jamaica

Press, Volume CIV, Issue 30862, 22 September 1965, Page 17

N.Z. Part At Jamaica

(Special Crspdt. N.Z.P.A.) LONDON, Sept. 20. Australia and New Zealand may raise a “new and serious” topic at the Commonwealth finance ministers’ meeting in Jamaica this week, says “The Times.” Both were important trading nations. Australia in particular was in the top dozen traders, and was one of the world’s biggest holders of foreign exchanges. But neither country was in the group of 10, the caucus of big financial Powers, and both were denied a direct voice in the future of the international monetary system, where reforms would soon be essential. “Inner Club” “The Times” said: “As members of the sterling area it is hard at the moment to see how thej’ could be admitted as full contributory members of the inner club which effectively decides world financial policy. “If their voices and currencies are to carry full weight with countries such as France some new arrangement may become necessary. Neither country is anxious to break up the sterling area.

“Apart from their loyalty to Britain, access to the London money market has always suited them both. The current high rates of return on their reserves banked in London are doubly attractive now that sterling has been redeemed from devaluation fears. “But there is little doubt that they will ask Mr Callaghan (the Chancellor of the Exchequer) to take careful note of their views before he gives Britain’s absent to any financial decisions which may begin to emerge from the meeting of the group of 10 and the annual meeting of the International Monetary Fund which follows the Commonwealth session.” “The Times” said that in the short run, however, all four wealthy Commonwealth countries, Britain and Canada

(who is also a member of the ■ group of 10), as well as Aus- ; tralia and New Zealand, will • agree that a serious shortage i of liquidity is in prospect. “This will intensify if trade ■ continues to expand satisfactorily in the next 12 months and Britain and America make further progress in reducing their deficits, and so ■ drying up the world’s trading 1 and investment funds. “A subsequent world-wide • resistance to imports would ’ damage Britain's chances of ■ making fresh headway in ■ world markets and earning I the funds to pay off interna- ’ tional liabilities.” Australia and New Zealand, • as major primary producers, would suffer early as a result i of any attempts by industrial I countries to increase their doi mestic food and raw material i production.