Address by the Prime Minister of Denmark1

International Monetary Fund. Secretary's Department
Published Date:
October 1970
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Hilmar Baunsgaard

On behalf of the Danish Government, I welcome the Annual Meetings of the Boards of Governors of the International Monetary Fund and the International Bank for Reconstruction and Development and its affiliates.

It gives us great pleasure that you have chosen Denmark for this year’s meetings of organizations which, in the course of a few decades, have become firmly established as important intermediaries of the international economic cooperation and development of the member countries.

It is my hope that you will also find time to acquaint yourselves with your host country, Denmark, which, from her modest place, endeavors to be a loyal member of the economic community of nations.

A contemporary Danish poet has thought up the following philosophical quip:

We shall have to evolve

problem-solvers galore—

since each problem they solve

creates ten problems more.

I am sure that all member countries, developing and highly industrialized nations alike, will recognize the truth of these words with a nod of concurrence. In the economic field, not only stagnation but also progress bring new problems calling for solution. All indications suggest that both the Fund and the Bank will be required to cope with a multitude of exacting and inspiring tasks.

In the developing countries—which are the majority of the member countries—these tasks arise above all from the dynamic problems inherent in economic growth. It is difficult, particularly for the people of the industrialized countries, to grasp all the implications of these problems. Denmark has had more than a hundred years to work her way through her own process of industrialization, but even then it would not have been feasible without support in the form of large-scale capital imports.

Modern information techniques and organized international capital transfers have afforded possibilities for the developing countries to go through this process in a much shorter period. But no one can ignore the range of social and human problems that follow in the wake of rapid upheavals in any tradition-bound social and economic structure.

In industrialized countries, including Denmark, the current debate is concentrated on problems of a different nature. In these countries, the main task is to promote harmonious and economic growth without inflation. This task is certainly not as easy to cope with as countries with other and more fundamental problems might believe. We shall all come to realize that industrialization is not a process you can go through in one leap. It creates its own new and continuous problems.

These problems are essentially bound up with all aspects of human welfare and well-being, including pollution and a host of other environmental problems.

The vision of an efficient society cannot be realized in a manner compatible with the dignity of man unless we extend it by a new dimension, which I would call social efficiency. The break-up of social structures which may result from the industrial explosion in developing countries, and all the problems of human well-being which envelop the industrialized society from the exhaust pipe of technology, are merely illustrations of the need to think in terms also of social efficiency.

Over the past decades the International Monetary Fund and the World Bank Group have rendered great contributions to the efforts designed to improve the standard of living, to promote economic development, and to liberalize world trade.

It is in some ways quite understandable if developing countries, in their efforts to promote their own economic development, try to build up a certain amount of national preference for their own industries, trade, and shipping. And it is equally understandable if some business and industrial interests in industrialized countries have opposing views.

If, however, we are to avoid a situation where countries, or groups of countries, will come to drive each other into mutually discriminatory measures to the detriment of all parties, we shall need sustained efforts to promote mutual understanding in international cooperation. I am sure we can look to the Fund and the Bank Group to remain important instruments for these efforts.

The two organizations have now reached a mature stage while developing a considerable degree of flexibility in their work.

The Fund has made a vital contribution to the efforts to overcome international monetary problems in recent years so that we have seen only a few set-backs to real economic progress and free economic relations. The collective creation of international liquidity through the Fund’s system of special drawing rights was the first step of this kind in the history of the world.

The World Bank Group has proved its great importance, not least in a long-range view, through its direct involvement in the economic growth of developing countries. The International Development Association’s new three-year program for soft-term loans to low-income countries has been met with warm response in Denmark. We are glad to contribute to this scheme but realize at the same time that the existing needs could call for even greater contributions.

We know that modern youth takes a keen interest in the progress of developing countries. Young people in industrialized countries feel that their own lives are bound up closely with the problems facing the developing countries. Most of the young people pin their hopes on continued development assistance, and many of them go out to take a direct and personal part in development work. I hope that this attitude, too, may serve as an inspiration for the Bank in its future work.

Mr. Chairman, my country and the Danish Government trust that this Annual Meeting—even if it is not going to deal with individual proposals of an epoch-making nature—will give rise to fruitful deliberations on the work of the Executive Directors in the coming year. We are happy to see these meetings held in Copenhagen. They serve also to widen public knowledge and understanding of the highly significant and world-wide - activities of the Fund and the World Bank Group.

I wish the organizations every success, both at this meeting in Copenhagen and in their future work.

Delivered at the Opening Joint Session, September 21, 1970.

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