THE PRESS TUESDAY, SEPTEMBER 2, 1980. Mr Muldoon on tour

Press, 2 September 1980, Page 20

THE PRESS TUESDAY, SEPTEMBER 2, 1980. Mr Muldoon on tour

The Prime Minister;. Mr Muldoon, who is now in New Delhi, is. a ; reluctant participant in the Commonwealth Heads of Government regional meeting to be held there. He ,has: never been persuaded that this meeting'of. leadersfrom Asia and the Pacific has a very useful purpose. His reservation is not simply because the problems of Asia and the Pacific are different in many respects, but also because only the heads of Commonwealth countries: in these areas attend. How can illicit drug traffic be discussed usefully without the presence of Thailand,. Burma, and Kampuchea? Or how can energy be discussed adequately without the presence of Indonesia and China, both of which have large oil reserves? Nevertheless, a regional meeting of Commonwealth members having been planned, New Zealand’s absence would seem odd.

Mr Muldoon is leading’ the discussion bn global • economic problems at the meeting, hoping to emphasise the implications for the region. Another main discussion" will be led by the Indian Prime Minister, Mrs Gandhi, on political developments' in the region. The .third, and potentially most useful topic,, will be on economic and other co-operation, to be led,by Malaysia. This last discussion will deal with terrorism, illicit drugs, trade, - and energy, which previous. Heads of ‘ Government meetings have sorted out as matters of great . importance. ; Some of Mr Muldoon’s time will be taken up with purely Pacific matters, . such, as the Pacific . Forum Line, which needs several million dollars, if -it is-to continue. He 1 , will .also discuss the new ' trade agreement in the Pacific, which Fiji -and Nauru have refused? to sign, and the problems, of "where Papua New Guinea troops have been putting down a rebellion. Papua New Guinea /is / likely to seek—and getbacking from other countries for its action im sending troops. . v Practically all the Pacific countries will have. representatives at New Delhi. Mr Muldoon is known to want to keep Pacific questions to be. dealt with, by Pacific; countries. .Whether using the Commonwealth regional meeting is a sound way of keeping Asian and! Pacific affairs, separate remains to be proved.

, ( The -New Delhi visit,-and possibly a \recreatidnal visit -to Mysore, will be the start of a six-week trip for Mr.' Muldoon. In'China, where he will go. next, and.- in Mexico'; where he will • go ■ just, -before returning home, ;'he,'will... make familiarisation tours. For China this will be part of a continuing series of- high-level exchanges ; between the two countries. Among the more important matters he will discuss , in China? are? affairs and events in Indo-China

and Afghanistan. The Chinese are send- ■ ing arms to the forces of the pasted Kampuchean leader, Pol Pot, through Thailand, and this policy may one day. plunge -the whole area? into war; The Chinese seem to,be in no hurry to contrive an end to friction in Indo-China. New Zealand’s interest will be served by pressing for a quicker solution. It must be hoped that Mr- Muldoon will make this clear to the Chinese leaders. Mr; Muldoon will also attend meetings of the International Monetary Fund and the World Bank in Washington. From these meetings he will try to take an assessment, of whether the world economy is likely to go through a short recession or a long one. His own view has been that it is likely to be a long one. As both an exporter and an importer, New Zealand is on the receiving end of changes in the world economy. Since many of the country’s most important trading partners will be at these meetings, it -will be useful to hear views on how they see the world economy. Possibly some of those attending will'be there with exactly the same intention‘as Mr Muldoon. At the very, least the swapping of notes should be useful. • ’

Mr Muldoon may even bring home some good cheer. There are signs of optimism in the United States. Housing and the car industry are looking.-up and, a recession . having ‘ thrown, economic forecasts into disarray, Presi-.. dent Carter has abandoned plans for# balanced Budget. Both President Carter and the Republican contender for the Presidency, Mr Ronald' Reagan, are talking of tax cuts. It looks as if the ‘ United States is in Mor a general stimulus to the economy, and such a stimulus would benefit New Zealand. It will mean that more;' Americans are working. The dismal side is that it will also csiiise higher inflation. Tne other two most important countries influencing the world economy, Japan and Wes.t Germany, may be more difficult .to gauge. Unemployment is growing in both. In West Germany, where an election is due later this year, a balance-of-payments deficit is being considered with reluctance. West Ger-, many, has shown sighs of being badly shaken by the latest rise in the price of oil. It. cannot hope to overcome this in the way it did in 1973-74 when the strength of its currency against the American dollar meant-that it survived with' a balance-of-payments surplus. Japan, ever- confident that it can eventually overcome'its problems by exporting more, , has alreadydecided to go into deficit? Whatever impression Mr Muldoon forms at the economic meetings, his view, and the views of others, may become worthless in the twinkling •' of an eye if there is another dramatic :rise in the price of oil. ; ; 5 .. . ;