The Western World's major industrial nations re-affirmed their commitment to the rapid reform of the world monetary system at the annual meeting of the World Bank and the International Monetary Fund at Nairobi, the Kenyan capital on Tuesday (September 25th).
GV Exterior Kenyatta Conference Centre.
SV Danish Delegation arrives.
SV Chairman Chambers arrives
SV Kenya Finance Minister Kibaki arrives
SV PAN Committee of 20 Chairman Wardhana enters.
SV Interior Chairman seated.
SV U.S Delegate Schultz speaking
SV Kenya delegate listens.
SV Italian Delegate speaking.
SCU Japanese Delegate Aichi listens
SV UK Delegate Barber speaking
TRANSCRIPT OF SPEECHES BY MR. BARBER, MR. SCHULTZ AND MR. KIICHI AICHI FOLLOW:
MR GEORGE SCHULTZ: "Two factors, mainly unforeseen a year ago, have been at work in the present surge of inflation. The first is that strong expansionary forces have coincided among virtually all industrial and developing countries. As a result, increases in demand have put pressures on supply, exposed unforeseen shortages of capacity, and driven up prices of materials. Second, the pressers on prices in two key areas, agriculture and energy, have been greatly aggravated by crop failures and weather and by shifts in production patterns and marketing policies."
SIGNOR CARLI: "A journey of a thousand miles begins with hut one step...Over the last year we have taken that step and many more on the long road to monetary reform. In the months ahead we shall have to translate the existing concessions in fundamental principles firstly into an agreement on the major issues, and then into a set of workable rules which all members will willingly adhere to in the forthcoming round of negotiations, with the aim of preparing a full Hueprint of the new monetary system for the next annual meeting. In the meantime, the I.M.F. should direct its action towards the maintenance of ordinary conditions in the exchange rate field.
MR. ANTHONY BAR BER: "And the more we can show our people at home in the developed countries that their money is being channelled to help the absolute poor, the easier it will be to eradicate poverty. And that is why I welcome so much the increased emphasis which the World Bank is placing on projects which direct aid to those whose need is greatest."
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Background: The Western World's major industrial nations re-affirmed their commitment to the rapid reform of the world monetary system at the annual meeting of the World Bank and the International Monetary Fund at Nairobi, the Kenyan capital on Tuesday (September 25th).
But they made it clear that major differences still divide them, and the prospects for an early agreement on the reforms looked slim at the end of the day's session.
The International Monetary Fund's "Committee of 20", charged with drafting the reforms, announced it would conclude its work by the end of July next year. But in the light of speeches by the Secretary of the United States Treasury, Mr. George Schultz, and the British Chancellor of the Exchequer, Mr. Anthony Barber many nations doubted whether the deadline could be met.
The issue of monetary reform is the major problem dominating the meeting, attended by more than 2000 official delegates from 126 nations and more than 3,000 observers. The conference was expected to reach major decisions in the monetary field, but after one year's work, the committee of Twenty Ministers have failed to agree on the mechanisms for implementing reforms
The strongest call for urgency in completing the reforms came from Mr. Anthony Barber, the chief British delegate. Mr. Barber said there was a growing sense of frustration and impatience everywhere over the slow progress. He said that to the ordinary man and woman, the constant succession of financial crises appeared incomprehensible, frustrating and Indicrous.
Mr. Goorge Schultz, the chief United States delegate, said the stage should be set for agreement on international currency reforms in the first half of next year. But he said, any lasting reforms would depend on whether the United States could eliminate its balance of payments deficit.
Another major issue facing the conference is the problem of contributions by the rich nations to the World bank's aid program for developing nations. The Kenyan Finance Minister, Mwai Kibaki, called for a review of the problems of international poverty, and urged the setting up of a permanent "Committee of 20" on development finance, similar to the existing Committee of 20.
The Governor of the Bank of Italy, Signor Guido Carli said monetary reform could not easily be reached within the Committee of 20, which was too unwieldy to complete its tasks within its deadline.