Warning on U.S. recovery

Press, 30 September 1983, Page 4

Warning on U.S. recovery

From

G. G. SHAND,

in Washington

The New Zealand economy will not benefit totally from the United States recovery because it is directly affecting only a few New Zealand commodities, said the Prime Minister, Mr Muldoon, yesterday. He agreed that the American economic revival would not mean a bonanza turnaround for the local economy as he did not expect lamb prices, for example, to get much of a lift

from it. The American upturn was only affecting prices New Zealand received for its forest products, aluminium, and to a certain extent, wool.

“(At this stage) our other major export commodities are not affected,” he said.

Mr Muldoon’s simple message was that while New Zealand would get some spin-off for times ahead, it could not rely on it totally to improve its relative position.

New Zealand, he said, would still need to rely on earnings from the energy projects to help improve its over-all balance of payments position. In speeches during the last fortnight, Mr Muldoon has constantly argued that the American recovery offers only false hopes of a permanent world recovery if action is not taken to relieve developing nations of their present debt and other problems. He is strongly against the

United States-International Monetary Fund posture which is attempting to force such nations to tighten their domestic policies in place of pleas for further aid. He said that if they are asked to tighten their belts much more they will “cut themselves in half.”

Mr Muldoon argues that forcing such constraints will not help world trade and therefore this could blunt, if not stifle, the upturn resulting from the American recovery.