Third World fears snub by ‘Big 4’

Press, 21 May 1981, Page 8

Third World fears snub by ‘Big 4’

NZPA-Reuter Libreville, Gabon

A plea for help from the poorer nations of the world will be made at an international economic gathering in Gabon today,. but financial leaders of four out of seven leading industrial democraciies will be absent.

The absence of Finance Ministers of the United States, Japan, West Germany, and France, even though the official reasons range from ill health to domestic political problems, has caused anxiety among some Third World delegates. They fear that the West may turn its back on the plight of the developing countries, according to informed sources. Delegations from the four nations will be among the 800 Finance Ministers, central bank governors and officials from 141 countries at this week’s meeting ,of ; the interiim committee; the main policy-making body of the International Monetary Fund. '

Only the delegations of Italy, Britain and Canada ■among the “Big Seven’? industrial democracies: will be headed by their Finance Ministers. . ' ’ . Some preparatory! talks have already been going on jn ,Gabon; bub the first Min-

. isterial-level meeting will start -today when Finance Ministers of the “Group of 24,” a caucus of 24 nations representing the Third World, meet behind closed doors. They will have before them a grim scenario drawn up by their experts, showing that the combined current account deficits of the developing countries which do not produce oil could well jump to more than $lOO billion next year, a huge rise from the $3B billion of only three years ago. The experts say these big deficits, i "caused by rising prices for Soil and basic commodities, ■ imperil ’ the economic development of the poor countries which include many of the world’s population. f The “Group of 24” is likely to ask the IMF. to make a hefty increase in the pool of credit it keeps available for member nations .which run into financial trouble. The pool is made up of Special Drawing Rights, the I.M.F.’s unit of account, which enables countries to borrow hard currency for their world trade because the right is measured against the main currencies./ ; ;. ’■ But informed- sources say there is little'..likelihood, ofthis move getting very far. It .

1 runs totally against the cure rent philosophy, of the f Reagan Administration, and s such conservatives as the 1 British Prime Minister (Mrs 1 Margaret Thatcher), who want to, keep a- tight grip on 5 credit to fight the inlation i which they believe threatens ; the whole world’s economic t stability. ' The United States > Treasury Secretary (Mr I Donald Regan) last week cut ) short: his trip to the Middle- ■ East, which . was. to have ' been followed by attendance at the meeting in Gabon, ; west Africa, so that he could ; be present; to a critical stage of the Reagan Administras tion’s tax proposals in Congress. The United States delegation could come under fire '•ver America’s attitude to ’eign aid. Vital funds for the Independent Development Association, which makes soft loans to the poorest nations, have not yet been released by Congress. The lack of these funds had other contributions has halted I.D.A. lending for new iP The call; for the I.M.F. to boost its credit pool will come before , tomorrow’s main'/ interim committee meeting ( which includes dele- ’• gates from.: developing: and y industrial nations.