Summit offers help to Third World

Press, 12 June 1984, Page 6

Summit offers help to Third World

By

SIDNEY WEILAND

of Reuters through NZPA London As forecast by Western leaders, their annual summit produced no surprises but it sent a strikingly conciliatory message to Moscow and offered a helping hand to some of the debtplagued Third World countries. Both moves were underscored by government spokesmen as proof of the value and authority of the summits, often assailed by critics as razzamatazz media events unsuited for real This

was the tenth summit since the series started in 1975.

For the fourth time, President Reagan came under pressure for high United States interest rates and a budget deficit that most Europeans blame for affecting their own economies. But it was mostly a calm summit, with no really big rows, officials insisted. “Everyone was acutely aware that Reagan faces reelection in November,” a senior European diplomat said as the summit ended. “Nobody wanted to rock the boat too violently.” ( The leaders of

major Western industrialised nations said the main battle was still against inflation. There was no alternative but to cut government spending and to follow “prudent monetary and budgetary policies,” they said. The summit’s message after about 16 hours of talks, a British official said, “is still the same economically, ‘steady as we go’,”. In a 12-page declaration, the U.S., British, Canadian, French, West German, Italian and Japanese leaders said that tough economic policies were helping the recovery from

the world recession. But they warned that “high interest rates, and failure to reduce inflation further and damp down inflationary expectations, could put recovery at risk.” Mr Reagan challenged European assertions that the U.S. deficit and interest rates were directly linked. In what was widely seen as a significant and timely gesture towards the Soviet Union, the Western leaders offered “extended political dialogue and long-term cooperation,” and called on Moscow to return to the armg negotiations it broke off fast year.

For the embattled Third World, the summit’s message was slightly more hopeful than at any time since “Reaganomics” decreed self-help rather than huge injections of foreign aid as the best way to combat poverty and under-development. The summit held out no prospect of big aid flows, but it pledged a friendlier approach to those ready to tighten their own belts. Countries like Mexico, which has accepted an austerity programme, will get longer term rescheduling for debt repayments, perhaps up to five or Uyjears,

the summit decided. Other critics said the summit ignored Latin American demands for an entirely new “global approach” to Third World debts, now totalling about SUS7OO billion and rising by about SUS 4 billion whenever Western interest rates go up 1 per cent. Basically, the summit said it would continue to deal with indebtedness on a case-by-case basis. On the four-year Gulf war, the summit called for an end to fighting but offered no direct involvement ■