World crisis worst since war, says U.S. Treasury chief

Press, 6 September 1980, Page 8

World crisis worst since war, says U.S. Treasury chief

NZPA Washington The United States Treasury Secretary (Mr William Miller) yesterday said that the world’s economy was in a “critically difficult period, easily as dangerous as any since” World War 11. To beat back this danger, he called for a renewed United States commitment to the International tary Fund and the World Bank and. sharply criticised advocates of restrictive trade actions and “other beggar-thy-neighbour policies.”

“History has demonstrated forcefully that efforts by individual countries to deal with their internal problems (such as unemployment) through such devices cannot succeed and in the end only worsen the situation for all,” Mr Miller said.

The Treasury Secretary spoke before the Economic Club of New York. A copy Of his text was released in Washington.Mr Miller’s strong declaration against trade restrictions came two days after the Republican presidential candidate, Ronald Reagan, vowed ■ to halt the “deluge” of Japanese car imports into the United States.

Mr Reagan, speaking in Detroit earlier this week, de-

parted from his usual freetrade advocacy, and said he would attempt to convince the Japanese it is in their own best interests to slow down the sale of their cars to this country— “until our industry gets back on its feet.”

Mr Miller also pointed out that, “in difficult times such as we are experiencing now, there is always the temptation to retrench, to cut back on our support for inter-, national organisations.”

The International Monetary Fund, World Bank, and other development banks did

not have a natural domestic constituency, Mr Miller said. But “our stake in a healthy world economy is large and growing larger,” he. said. . “Unfortunately, international tensions — political and economic — pose serious threats to the global economy/’ the secretary said. He pointed specifically to the’ Iranian .revolution, Soviet intervention; in Afghanistan, and turmoil 'in South-East Asia In addition, dramatic oil price increases since the end of 1978 have slowed down World economic growth, ignited' inflation, and sharply eroded the balance-of-pay-ment positions of most nonoil producing nation?, both developed and developing.

At the same time, nations in the Organisation of Petroleum Exporting Countries are accumulating a vast surplus, estimated between $lOO,OOO million to $120,000 million.

So far, recycling this surplus to help deficit-ridden nations had been handled “satisfactorily,” Mr Miller told his audience. “But success so far is not a reason for complacency . . Individual countries are beginning to encounter financing difficulties,” and some were approaching their limits on borrowing.