Good reception for P.M. at Pacific conference

Press, 26 May 1984, Page 6

Good reception for P.M. at Pacific conference

NZPA correspondent Vancouver Pacific Basin businessmen meeting in Vancouver appeared to appreciate an analysis of world monetary problems presented by the Prime Minister. Sir Robert Muldoon. Sir Robert's address was a basic primer on his ideas for reform of the trade and payments system and restructuring international institutions. One New Zealand businessman commented that the 30 New Zealanders attending the pacific Basin Economic Council meeting learnt more of the Prime Minister’s ideas in Vancouver than they had in New Zealand. Sir Robert also attacked

the concept of the Pacific Basin as an economic unit — a point taken by about 409 P.B.E.C. delegates who understand global interdependence but find that the council provides a convenient forum to discuss global problems and further business contacts. Sir Robert spoke at the conference this week after a fortnight of meetings with politicians in Washington. Paris and London. What was needed, he said, was a greater allocation of resources to the International Monetary Fund with a corresponding lengthening of conditions for borrowing countries. The World Bank also needed to be allowed to get further into general lending

rather than funding specific projects, he said. Both the World Bank and the I.M.F. should also work more closely with private banks. The’ Prime Minister talked about future allocations of special drawing rights, the credits given by the 1.M.F.. and the problems the system posed for countries ' too poor to borrow from the fund. Fund member countries now have drawing rights in proportion to their quotas. Sir Robert said this meant that countries such as the United States, which did not need them, got the lion's share. The sort of system he saw as a possibility — subject to tuning — was a three-tier one. This could establish a

"first" category of the richest nations with no drawing rights, a "second" category where countries could draw S.D.R.s equal to their quotas, and a third" category of the poorest countries which could draw on the rights given up by the richest countries. Sir Robert said he had discussed the idea with American officials but had received no positive response yet. The Prime Minister dismissed a suggestion from a New York banker that injection of a little more inflation might encourage emergence from recession. That idea. Sir Robert said, was "politically unsaleable and economically unwise."