Selected Addresses Delivered at the Closing Joint Session1
- International Monetary Fund. Secretary's Department
- Published Date:
- November 1961
Statement by the Governor for Libya—Khalil Bennani
Please allow me to express our deep grief and sorrow at the sudden and tragic death of the famous Secretary-General of the United Nations, Mr. Dag Hammarskjold.
It is no mere conformity with convention that I express, on behalf of my delegation, our sincere gratitude to the Government and the people of the Republic of Austria for their warm welcome, friendliness, and gracious hospitality. My delegation is also very pleased to welcome the new member countries that have joined our institutions since our last Annual Meeting. We wish them the very best of luck in their national efforts to develop their economies, and we look forward to their increasing participation in promoting international economic cooperation.
During the past four days, we have listened with great interest to many stimulating and constructive statements made by the heads of our international institutions and fellow Governors. The essence of their statements, as well as the facts and figures contained in the last Annual Reports of our institutions, illustrate, once more, the sharp difference and contrast between the present economic problems of the industrialized nations, on the one hand, and the less developed countries, on the other. In this connection, it is sufficient to point out that, while the basic problem of the advanced economies is how to achieve greater economic integration and stability, the less developed countries are basically engaged in transforming their largely unorganized and subsistence activities into modern and viable economies. These differences and contrasts confront our international institutions with the need for flexible policies to suit the different circumstances of various member countries.
For example, it is not sufficient, or perhaps even necessary, for the Fund to concentrate on achieving multilateral trade and monetary convertibility when it deals with the fundamental problems of the less developed countries in their efforts to create viable economies. Multilateral trade and full monetary convertibility may not always be the best means to achieve such an objective. This is not meant to minimize the importance of multilateral trade and monetary convertibility. Rather, it is meant to point out that the economies of the less developed countries will need a period of rapid growth and protection before they can become competitive with the export economies of the more advanced nations. The International Monetary Fund and the World Bank and its affiliates should use all possible means to make this period as short as possible. One of these means may be the promotion of regional economic integration, even if this may mean certain inefficiencies in the early stages of development.
Another issue of great significance in this connection is the persistent problem of harmonizing international trade with international aid. The honorable Governors for Australia, Ceylon, and many others made it abundantly clear that without such harmonization no amount of international aid can be effective in the long run. We believe that the initiative for finding an acceptable solution to this problem rests largely with the industrialized countries.
Although my country has not, so far, borrowed from the Bank nor drawn any currencies from the Fund, we have always maintained and tried to reinforce our participation in both of these institutions and their affiliates. We do this in the belief that it is the best way of contributing our modest share to world economic cooperation and understanding. We are fully aware that such collective efforts can only help us to help ourselves, and that the final outcome of our national and regional economic and social development will depend upon our own efforts and sacrifices. We in Libya have been the recipient of various forms of technical assistance from the United Nations. In addition to that, and at our request, the World Bank made a survey of our resources and outlined some valuable recommendations designed to promote our economic development. We are now in the process of incorporating these recommendations into a national Five Year Plan that will be initiated shortly. For the formulation and supervision of our development programs we have established a National Development Council. To finance such development plans, the Council is authorized by law to receive 70 per cent of our forthcoming oil revenue. Since the middle of 1959, when oil was first discovered in commercial quantities, there has been a substantial increase in oil exploration and discovery. The total number of wells drilled increased from 105 at the end of May 1960 to 242 by the end of April 1961, while the number of productive wells increased from 29 to 87 during the same period. As of April 1961, the total surface area under concession was over one million square kilometers, or nearly two thirds of the total area of the country. This land is divided into 90 concessions held by 19 concession holders whose nationalities are as follows: 12 American, 1 British, 1 Anglo-Dutch, 2 German, 2 Italian, and 1 French. Last September, one major oil company initiated the construction of a 32-inch pipeline from the Zelten field to Mersa Brega, where facilities for loading crude oil and a small harbor for loading refined oil and unloading dry cargo are being rapidly constructed. It is expected that shipment of Libyan crude oil from the Zelten field will begin by January 1962. The future of the productive oil wells in Libya is more, we hope, than encouraging. We are, therefore, fully aware that, in addition to capital, economic development requires technical and administrative skills, and, for this reason, we are counting on the assistance of the Bank, the Fund, and the various agencies of the United Nations to assist us in the training of our own nationals, as well as the recruitment of advisory staff.
Mr. Chairman, allow me to thank you most sincerely for your very stimulating address at the opening of our session and for the very able and cooperative way in which you have conducted our deliberations. I would like also to congratulate the Governors for Saudi Arabia and Chile on their election as Chairman and Vice Chairman for our next Annual Meeting and I am confident that they will serve us with ability and wisdom. Finally, we pray to God for guidance, as we seek to serve the common interest of our developing countries.
Statement by the Governor for Mexico—Antonio Ortiz Mena
It is a great honor for my country and a pleasant duty for me to have been designated to speak on behalf of the Latin American countries and express first of all our deep thanks to the Government and people of Austria, as well as to the authorities of the lovely city of Vienna, for their especially generous welcome, which has enabled us to enjoy the great beauty of this capital where the greatest manifestations of Western culture are brought together and exalted, giving it a splendor and brilliance that can hardly be equaled.
At the request of the Governor for Argentina, I transmit to you the cordial invitation of that country to have for the first time in the history of these organizations a South American city, Buenos Aires, as the headquarters for the next meeting to be held outside the United States.
Latin America joins its voice with that of the nations which have expressed their deep sorrow at the loss of one of the most vigorous fighters for world peace and the rights of weak countries, Mr. Dag Hammarskjold, Secretary-General of the United Nations, whose life will remain an admirable example for us all of valor and sacrifice.
I wish on behalf of the Latin American countries to say a cordial good-by to Mr. Robert L. Garner, who, first in the Bank and then in the International Finance Corporation, was responsible for an important part in the always difficult task of setting a new organization off on the right road toward the fulfillment of its mission.
I thank the technical staff and the secretariat of the various international organizations for the magnificent work of administration and investigation carried out during the past year, one of the phases of which has culminated in the possibility now offered to us of a system of interpretation which has enabled me to speak in Spanish with the assurance that I will be heard and understood simultaneously by all my colleagues.
On beginning my statement on behalf of the Latin American countries, it is imperative to refer to the important decisions for the future of that area of the world adopted recently at the meeting in Punta del Este, Uruguay. We are sure that the aims set forth there will mean for these countries what other plans in their time meant for war-devastated Europe. Therefore, as spokesman of these countries, I urge all the international financial organizations, in the future course of their activities, to take part with the greatest interest and enthusiasm in achieving those lofty human and economic objectives on which the Charter of Punta del Este is based.
The results of this meeting inspire our hopes, since they are indeed fruitful from the point of view of the Latin American countries. We have been able to note here the expansion of the activities of the International Monetary Fund in such a way as to make it an institution whose increasing usefulness goes beyond what the founding members envisaged for it when it was established. The Fund has extended broad and timely aid to many of our countries at a time when the economic situation has meant the stagnation and, at times, the decline of their foreign exchange receipts, as is pointed out in the magnificent Report of the Executive Directors of that organization.
We also see that the institution is being transformed and is attacking problems with the required speed and expeditiousness; thus, we take pleasure in acknowledging publicly the fact, which we had been able to appreciate earlier, that the Monetary Fund, in pursuing financial stabilization in the countries, does so fundamentally in order to establish firm foundations for their sound and orderly development, and that stability is not an end in itself, but an essential means for achieving economic progress, and, in particular, for ensuring that this progress extends effectively to the large masses of people and does not give rise to the creation of large fortunes in sectors favored by the rise of prices.
We note also that the Fund’s activities will be more beneficial with frank acceptance of the principle that certain capital movements are problems of normal occurrence in the economic world and that the assistance provided by the Fund to cope with them is indispensable for the fulfillment of the original aims of Bretton Woods. In addition, we see this realistic and flexible attitude shown also in recognition of the need for using resources obtained by special borrowing arrangements in countries whose foreign exchange receipts and financial strength are high, in order to keep unimpaired the strength of the key currencies, which are frequently subjected to inordinate pressures.
The Latin American countries wish to mention especially the importance for the stability of their currencies of the Fund’s principle of assistance in the case of inconvenient movements of capital. In fact, an outflow of capital, even though not of large magnitude, is important to any country in which it occurs, and for that reason it should by no means be considered that the Fund should intervene only when currencies in wide international use are affected.
It is singularly appropriate at this meeting, which is being held in industrial Europe, to emphasize to the directors of the economy and finances of the countries importing primary products that any credit mechanism is only a poor substitute for the volumes of foreign exchange the export countries fail to receive because of the high and sometimes unnecessary taxes and obstacles frequently imposed on these products. A very illustrative example is the case of coffee, in which high import and consumption taxes seriously affect the economies of 14 Latin American countries.
We should note that the picture of financial measures of international cooperation would be incomplete unless the utilization of special credits to support foreign exchange receipts affected by large fluctuations in the prices of raw materials could be placed in an institutional framework. A fundamental part of this kind of credit should be adjustment of the terms of payment to recovery of normal foreign exchange receipts.
We request the most complete understanding and collaboration of the International Monetary Fund authorities in order that the group of experts established under the Punta del Este Charter may recommend the most suitable machinery for solving this problem. We also express here our confidence that the Fund will permit prompt access to its resources for countries in need of it by reason of the reduction of their tariffs for purposes of the Latin American economic integration programs.
With respect to the activities of the World Bank, which are always of great interest to us, we rejoice that the invitation to the industrialized countries has been repeated to increase their efforts directed at collaborating with the Bank by means of joint loans and with its affiliated institutions by means of large contributions of resources, in order to permit them to cope more effectively with the demands of a world in the vital process of development.
These questions are closely related to the profound ideas of President Black, soundly based on his experience, on the need for not placing less emphasis on the quality of the effort than on the magnitude of the aid. The European countries are and should still be the most important source of capital, equipment, technical knowledge, and example for the underdeveloped countries. On the other hand, it is well to remember that the Latin American countries and, indeed, many underdeveloped countries have achieved increasing expansions of their annual output in relation to the volume of their investments. These already high coefficients of economic productivity which, for that matter, may be exceeded, are adequate to attract large amounts of new capital, with the certainty that the effort will not be made in vain and that the use of the capital will be highly beneficial.
Most of the Latin American countries, for their part, already have public and private credit institutions and industrial organizations fully qualified to handle efficiently the long-term loans essential for their increasingly complicated and modern economic structure. Thus, we concur fully with the appeal made to the capital-exporting countries that they increase the volume and improve the terms of their credits both as a means of making the investment more effective and as a means of enabling the countries receiving funds to handle large foreign loans at terms which make payment possible. Although some countries have a concentration of short-term foreign credits, this is not due to the fact that they try to get credits of that kind, but that they are frequently the only credits available to them, in contrast to the basic terms they should obtain.
We wish to make special mention of the liberal credit policy adopted by the International Development Association, which is so important for some countries, of making 50-year credits with other favorable conditions, although all loans cannot and should not be granted on such terms. It is obvious, however, that the greatest obstacle the underdeveloped countries will face in the future is the lack of resources of this kind. Therefore it is time to make a study directed at permitting as soon as possible the endowment of our international financial organizations with adequate resources to enable them to measure up to the task with which they have been entrusted. It becomes clear, then, that all countries should take part in this Association and that the capital-exporting countries should make the largest possible contribution to increase its loanable resources. Only in this way will it be possible to achieve the objectives of economic development, the importance of which is clearly evident when one considers the observation of Under Secretary of State George W. Ball that “two billion human beings are no longer willing to accept the miserable living conditions patiently borne by their forefathers.”
September 22, 1961.