I.M.F. Urges Greater Efforts By All

Press, Volume CVIII, Issue 31781, 11 September 1968, Page 13

I.M.F. Urges Greater Efforts By All

(N.Z.P.A-Keuter—Copyright) WASHINGTON, September 9. The International Monetary Fund has served notice on rich and poor countries alike that greater efforts will be needed if the developing nations are to achieve satisfactory economic growth.

In its annual report, the I.M.F. noted that expansion in industrial countries in the early part of this year had “undoubtedly benefited the exports of primary producing countries and led to a recovery in their current account”

But it issued a warning that balance of payments factors would continue to constitute “a periodic brake on development efforts of primary producing countries unless the flow of capital and aid to them is expanded substantially and unless their exports are afforded freer access to the markets of industrial countries.”

The developing countries were urged to achieve “a greater degree of financial stability in order to stimulate the inflow of foreign resources.”

They were also told to take “various measures on the supply side if an increasing flow of these resources is to be used effectively and if the capacity to fill expanded export markets is to be developed.” TRADING DEFICITS The report said that the aggregate trading deficit of the less-developed, primaryproducing nations with the rest of the world rose by about SNZI3SOm in 1967 to about SNZS3SOm. It noted, moreover, that the fall in exporth growth rate among primary producing countries—generally those furnishing raw materials to the rest of the world and not considered industrial—was

concentrated in the less welloff nations. It said the apparent 1967 growth rate of 4 to 4j per cent by primary producing countries —about the -same as in the previous year—could not be considered satisfactory in view of the high population growth and low levels of income prevailing in most of these countries. ASIAN TREND

Observing that most Asian countries experienced unchanged or lower exports in 1967, the report referred to “adverse agricultural conditions in 1966 and the early months of 1967 in the Indian sub-continent, Indonesia and the Philippines,” and to “declines in the prices for some of the major exports of the region, notably rubber, tea, tin and fibres." It said the improvement in

agricultural conditions since then “has led to a resumption of economic expansion and to a recovery of export earnings.” The fund noted that the common pattern in LatinAmerica was “a worsening in merchandise trade balances that was not quite offset by an increase in receipts of capital.” The report recalled New Zealand’s drop in overseas earnings through the slump in wool prices in 1966-67 and the fact that it had devalued the dollar last year. It noted that a tendency toward conditions of excess demand had prevailed but that the pace of growth lessened In 1966 and slowed further, in the following year in response to restrictive policies as well as to lower export earnings.