P.M. to address U.N. conference

Press, 7 June 1983, Page 1

P.M. to address U.N. conference

NZPA staff correspondent Belgrade Problems facing the world’s developing countries will be highlighted at the United Nations’ Conference on Trade and Development which opens in Belgrade today. Commodity prices, international trade and protectionism, and monetary and financial issues are being discussed by delegates from 160 countries during the four-week meeting. The U.N.C.T.A.D. meeting is the only occasion this, year that all regional groups representing all members of the inter-

national community can review main issues confronting the world economy, says the Secretary-General, Gamani Corea. The last conference was in Manila in 1979. U.N.C.T.A.D. was set up in 1964 to promote better international trading conditions for developing countries and to help raise their standard of living. The Prime Minister, Mr Muldoon, who is one of only half a dozen heads of government attending the conference, will be one of the first leaders to speak. His address will come immediately after that of

President Reynaldo Bignone of Argentina, whose country was host to the Group of 77 developing countries’ meeting in March. Mr Muldoon, who has never attended an U.N.C.T.A.D. meeting before, decided to attend because he sees it as an important forum to put forward his proposals for a new Bretton Woods meeting to tackle world monetary issues.

Other . leaders at the meeting include the Indian Prime Minister, Mrs Indira Gandhi, and President Hosni Mubarak of Egypt. Mr Corea, speaking be-

fore the conference started, said it was taking place at a time of crisis for the world economy as a whole, but especially for developing countries.

Commodity prices in real terms had sunk last year to their lowest levels since the depression of the 1930 s and in some cases did not even cover the cost of production. For the period 1980-82, the aggregate loss of export earnings by developing countries resulting essentially from the collapse in commodity prices was estimated at $2l billion.

As a result, developing countries which depended

heavily on commodity exports had been obliged to cut back sharply on imports of goods and equipment vital to their development, depriving other countries of a significant market The U.N.C.T.A.D. Secretariat says remedial action to deal with this should include bringing into effect the Common Fund for commodities which would provide funds for the financing of buffer stocks. But the agreement establishing the fund has so far been ratified by only 49 of the 90 countries required to bring it into force. The Secretariat has also

voiced concern at the effect on developing countries of growing protectionism. These countries, which it says were the “most dynamic partners” in world trade as exporters and importers in the period 197381, were encountering heightened protectionist barriers which affected their ability to service and repay their debts. Mr Corea, in a report to the conference, criticises the General Agreement on Tariffs and Trade for what he says is its inability to deal with restrictive trade measures

On world monetary issues, the secretariat says a number of developing countries are in danger of economic and financial collapse unless they get an immediate injection of liquidity. He points out that current account deficits of develop- j ing countries soared to $7O ' billion in 1981, compared with $32 billion in 1978, and $lO billion in 1972. One of the measures proposed to deal with liquidity problems is a further issue by the International Monetary Fund of its special drawing rights to the extent of at least $3O billion over two years.

The United States is cool towards U.N.C.T.A.D., which it sees as a useful forum for exchanging views rather

than one which should make resolutions that could lead to radical changes in the world financial and economic system.

Washington is opposed to rebuilding the system and considers existing bodies such as the I.M.F. and World Bank, which Western nations dominate, as the right ones for tackling issues such as the Third World’s $6OO billion of debt. The “Big Seven,” the United States, Britain, France, West Germany, Italy, Canada, and Japan, have said that they would give special attention to development aid. Western nations at present give the Third World only half the United Nations’ aid target of 0.7 per cent of national output. The “Big Seven” said they would take part in the conference with “understanding

and co-operation,” but made no specific pledges.

Other Western nations, and especially the Nether-

lands, are expected to push for special action programmes to help the 36 least developed countries, most of ■ whiich are in Africa.

European diplomats see the economic demands of the developing nations as more realistic, pragmatic and well-prepared than they were at the last conference at Manila in 1979, and say this could help achieve results. The West in general is more responsive to Third World needs, they say. But, developing nations say the West is far from accepting that each group depends on the other and that recovery in Western countries will be stalled unless they boost Third World economies.