No relief from debt load

Press, 11 May 1977, Page 2

No relief from debt load

The growing indebtedness of developing nations would probably not be the subject of a moratorium, Mr P. G. Wodtke, senior vicepresident of the Swiss Bank Corporation, told the P.B.E.C. conference yes ter-, day. However, some attempt to renegotiate debts could be made in individual cases. Most developing countries put great importance on their credit standing, said Mr Wodtke. Most finance ministries and banks in developing countries were not likely to join each other to violate the principle of honouring debts. “However, it will become increasingly clear that any government guarantee, whether from a developed or developing country is not a universally acceptable security,” said Mr Wodtke. “The criterion for a good government loan will increasingly be how effectively the borrowed funds are employed to create a productive new asset.” The New Zealand Government’s policy of limiting the net immigration gains to 5000 people a year had misfired, the brakes being applied at a time of reduced personal expectations. “This applied in particular to the Pacific Islands community and has had a sig-

nificant effect on the reduced level of tourism,” Mr Wodtke said. The unbalanced economy meant a dismal future for tourism in New Zealand, said Mr E. N. Thomas in his report to the tourism session of the conference. The tourist industry in New Zealand was headed for the slowest growth rate it had known. The unbalanced economy was reflected in the high inflation rate, said Mr Thomas.