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Japan - State Department Telegrams: To SECSTATE - NODIS (6)
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1553723
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Japan - State Department Telegrams: To SECSTATE - NODIS (6)
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Presidential Country Files for East Asia and the Pacific (Ford Administration)
East Asia and Pacific Country Files
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Japan
Summit meetings
Foreign economic affairs
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1975-12-31
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12
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1975
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1975-09-01
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9
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1975
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The original documents are located in Box 8, folder "Japan - State Department
Telegrams: To SECSTATE - NODIS (6)" of the National Security Adviser Files:
Presidential Country Files for East Asia and the Pacific at the Gerald R. Ford
Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
LDX I
of STATE
Department of State
UNITED STATES OF
30 SEP 75Z 18
24
TELEGRAM
SEGRET
NOD251
ACTION COPY
PAGE 01 TOKYO 13754 3018132
$
46
ACTION NODS-00
INFO OCT-01 ISO-00 /001 W
054429
R 299945Z SEP 75
/
FM AMEMBASSY TOKYO
TO SECSTATE WASHOC 3636
SECRET TOKYO 13754
NODIS
DEPT PASS TREASURY FOR UNDERSEC YEO
E.O. 11652: GDS
TAGS: PFOR, JA
SUBJECT: ECONOMIC SUMMIT
S
SUMMARY: VICE MIN OF FINANCE YOSHIDA VERY MUCH CONCERNED
WHETHER PREPARATORY CONFERENCE TO MEET NEXT WEEK WILL DISCUSS
INTERNATIONAL MONETARY MATTERS AS POSSIBLE ITEM FOR SUMMIT
CONFERENCE AGENDA. IF THIS THE CASE, YOSHIDA WOULD WISH
TO BE SECOND JAPANESE REP AT PREPCON. YOSHIDA SPECIFICALLY
REQUESTED RESPONSE AT EARLIEST DATE. END SUMMARY.
11
1. VMIN YOSHIDA DISCUSSED SUBJECT WITH FINATT. SAID JAPAN
"CANNOT RULE OUT THE POSSIBILITY OF RATHER CONCRETE DIS-
CUSSIONS ON THE ADMINISTRATION OF EXCHANGE RATE (SAY,
STABILIZING THE RELATION BETWEEN THE EUROPEAN "SNAKE" AND
DOLLARS) BEING SUGGESTED FOR THE SUMMIT CONFERENCE BY SOME-
ONE ELSE." THEREFORE, HE WOULD APPRECIATE "IF YOU COULU
LET US KNOW AT THE EARLIEST POSSIBLE DATE WHETHER THE
UNITED STATES IS PREPARED TO GO INTO DISCUSSION ON SUCH
ISSUES." " YOSHIDA SPECIFICALLY REQUESTED TRANSMITTAL OF
THIS QUESTION TO TREASURY UNDERSEC YEU FOR RESPONSE.
FORD
S
2, YOSHIDA SAID THAT FINMIN OHIRA WAS TOLO BY SEC SIMON
&
ON AUG 3a THAT HE WAS OPPOSED TO TAKING UP THE INTER-
NATIONAL MONETARY SYSTEM FOR DISCUSSION AT THE SUMMIT
GERALD
LIBRARY
CONFERENCE. YOSHIDA NOW WANTS CLEAR CONFIRMATION THAT
SECRET
GG 8/31/01
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
Digitized from Box 8 of the National Security Adviser Files: Presidential Country Files for East Asia and the Pacific at the Gerald R. Ford Presidential Library
N
OF STATE
Department of State
UNITED STATES OF STATEMENT
TELEGRAM
BERRET
S
PAGE 02 TOKYO 13754 301813Z
"THE UNITED STATES WILL NOT CHANGE ITS VIEWS THAT THE
INTERNATIONAL MONETARY SYSTEM SHOULD BE EXCLUDED FROM THE
TOPICS OF THE SUMMIT CONFERENCE, EVEN IF FINANCE MINISTERS
ARE TO BE REPRESENTED THERE." ACCORDING TO RUMOR WE HEARS
FROM LONDON, DEREK MITCHELL, HM TREASURY, PLANS TO ACCOM-
N
PANY HUNT TO PREPCON.
3, YOSHIDA ALSO UNDERSTANDS THAT IN ADDITION TO
SECRETARIES OF THE TREASURY THE SUMMIT CONFERENCE WILL
INCLUDE SECRETARIES OF STATE.
4, ACTION REQUESTED: REPLY TO QUESTION POSED IN PARA 1
FOR TRANSMITTAL TO MIN FINANCE AND FOREIGN MINISTRY
OFFICIALS DIRECTLY CONCERNED.
SHOESMITH
S
N
FORD
S
&
GERALD
LIORARY
SECRET
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
WH
2
N
8 DEC 757 03.57
001651
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTI
NOD5A9
PAGE 01 TOKYO 17378 01 OF 11 0803447 COPY 11 OF 15 COPIES
64
ACTION NODS-00
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N
C 0 - E N T $ SECTION 1 OF 11 TOKYO 17378
NODIS
FOR: S/P HIR LEWIS AND EB = ENDERS FROM LORD AND RODMAN
E.O. 11652: GDS
TAGS: ECON, DVIP (KISSINGER, HENRY A.)
SUBJ: CIEC SPEECH
1. FOLLOWING IS THE LATEST DRAFT OF THE CIEC speech,
S
WE TRANSMIT THIS TO YOU SO THAT YOU AND OTHER PARTICIPANTS
AT THE SPEECH MEETING CAN HAVE A CHANCE TO REVIEW THE
DRAFT AS IT NOW STANDS BEFORE THE MEETING, SUGGEST YOU
DO NOT REPEAT NOT TRY TO TYPE THIS SINCE IT WILL
UNDOUATEDLY BE UNDERGOING FURTHER CHANGES ON THE PLANE
TRIP HOME.
N
BEGIN TEXT,
CIEC SPEECH
(DECEMBER 1975)
WE MEET HERE TO LAUNCH THE DIALOGUE THAT HAS BEEN SO
OFTEN URGED, AND so LONG AWAITED, OVER THE PAST TWO YEARS,
D
THE COVENING OF THIS MEETING TODAY SHOULD ITSELF BE A
CAUSE OF HOPE. FOR IT DEMONSTRATES OUR COLLECTIVE RECOGNI-
TION THAT CONSUMER AND PRODUCER, INDUSTRIAL AND AGRICULTURAL,
DEVELOPED AND DEVELOPING, RICH AND POOR, MUST TOGETHER
ADDRESS THE CHALLENGES OF THE GLOBAL ECONOMY. THE UNITED
STATES REDEDICATES ITSELF TO THIS TASK. WE DO SO IN OUR
S
OWN SELF-INTEREST S WELL AS THE WORED'S INTEREST.
IN THE PAST TWO YEARS WE HAVE ALL SEEN THAT INFLATION Fune
CONFIDENTIAL
?
lab 8/31/01
GERALD
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
ZODIU
OF STATE
Department of State
UNITED OF AMERICA
TELEGRAM
STATES
CONFIDENTIAL
PAGE 02 TOKYO 17378 01 OF 11 0803442
AND RECESSION IN ONE COUNTRY WILL SPREAD TO OTHERS.
EXPERIENCE SHOULD HAVE PROVED THAT NO COUNTRY CAN EXPORT
ITS ECONOMIC DIFFICULTIES OR ACHIEVE REDRESS BY EXACTING
AN ECONOMIC PRICE FROM OTHERS. IT FOLLOWS THAT NO NATION
OR GROUP OF NATIONS CAN EVEN BEGIN TO SOLVE ITS ECONOMIC
PROBLEMS IN ISOLATION, BECAUSE THE WORLD INCREASINGLY IS
A SINGLE INTERMEPENDENT ECONOMIC SYSTEM.
WE HAVE LEARNED ALSO IN THE PAST TWO YEARS HOW MUCH
N
ECONOMIC DISTRESS MAGNIFIES THE CHALLENGES OF CIVIL
GOVERNMENT IN ALL OUR COUNTRIES, CLOUDING THE PROSPECTS OF
SOCIAL PEACE AND DEMOCRATIC INSTITUTIONS. WE HAVE SEEN
THAT NATINAL ECONOMIC PROBLEMS BECOME INTERNATIONAL
PROBLEMS, SPAWNING CLASHES OF INTEREST AND PROTECTIONIST
PRESSURES THAT STRAIN THE FABRIC OF COLLABORATION EVEN
AMONG COUNTRIES THAT ARE TRADITIONAL FIRENDS. AND WE HAVE
ALL COME TO UNDERSTAND THAT THE COMPETING CLAIMS OF
DEVELOPED AND DEVELOPING, CONSUMER AND PRODUCER, POSE A
FUNDAMENTAL CHALLENGE TO 2 STABLE AND JUST INTERNATIONAL
ORDER.
THUS THE ISSUE AT BOTTOM IS NOT E-ONOMIC BUT POLITICAL:
S
WITH WHAT ATTITUDE WILL GOVERNMENTS RESPOND TO THESE
STRESSES IN THE INTERNATIONAL ARENA?
IT IS MY COUNTRY'S CONVICTION THAT TESTS OF STRENGTH
PRODUCE NO LASTING BENEFIT FOR ANY NATION. THEY HAVE ONLY
COMPOUNDED THE INTERNATIONAL PROBLEMS OF INFLATION AND
RECESSION, THE UNITED STATES, AS THE WORLD'S MOST
POWERFUL ECONOMY, HAS PROVED ITS RESILIENCE ONCE AGAIN:
N
WE ARE ON THE ROAD TO RECOVERY. AND THERE CAN BE NO DOUBT
THAT WE WOULD BEST SURVIVE ANY NEW ROUND OF ECONOMIC
WAREARE, BUT WE BELIEVE THE WORLD DESERVES SOMETHING
BETTER. THE APPROACH THAT MY GOVERNMENT TOOK AT THE
SEVENTH SPECIAL SESSION OF THE UNITED NATIONS GENERAL
ASSEMBLY THREE MONTHS AGO REFLECTS OUR VISION OF A MORE
D
POSITIVE FUTURE.
THE INTERNATIONAL ORDER OF THE POST-WAR PERIOD IS
UNDERGOING RADICAL CHANGE. THE ECONOMIC SYSTEM THAT sus-
TAINED WORLD GROWTH FOR A GENERAL HAS BEEN TRANSFORMED
BY POLITICAL EVOLUTION AND NEW CENTERS OF ECONOMIC POWER,
S
REVOLUTIONS IN COMMUNICATION AND TRANSPORTATION AND IN THE
MEANS OF PRODUCTION HAVE EXTENDED THE RANGE AND MOBILITY
rune
OF CAPITAL, TECHNOLOGY AND MANAGEMENT SKILLS WORLD WIDE.
&
CONF IDENTIAL
GERALD
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
N
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL
PAGE 03 TOKYO 17378 01 OF 11 0803442
SO TOO HAS GROWN THE REACH OF HUMAN ASPIRATIONS. THE
ORDER OF THE FUTURE IS YET TO BE FOUND. THE WORLD'S NATIONS
CAN STRUGGLE IN NATIONAL OR IDEOLOGICAL CONTENTION--
IN OTHER WORDS IN ANARCHY -- OR THEY CAN ACKNOWLEDGE THEIR
INTERDEPENDENCE AND ACT FOR THE FIRST TIME AS A WORLD
COMMUNITY.
TOUS OUR DECISIONS HAVE PROFOUND IMPLICATIONS.
THE SEVENTH SPECIAL SESSION OF THE UN GENERAL ASSEMBLY
REACHED AN IMPRESSIVE CONSENSUS ON COLLECTIVE ACTION ON A
N
RANGE OF ECONOMIC PROBLEMS. THIS COMMITMENT TO COOPERATION
WAS AN ENCOURAGING DEVELOPMENT. IT CAN BECOME A BENCHMARK
IN HUMAN AFFAIRS -- IF ITS SPIRIT IS CARRIED FORWARD. LET US
GET DOWN TO BUSINESS. LET US TAKE UP SOME OF THE UNFINISHED
TASKS OF THE SPECIAL SESSION. LET us MAKE. THIS CONFERENCE
THE REGINNING OF THEIR ACHIEVEMENT.
THE ROAD TO THIS CONFERENCE
THE FIRST AND MOST DRAMATIC CHAALLENGE TWO YEARS AGO
TO THE STABILITY OF THE INTERNATIONAL STRUCTURE WAS THE
ENERGY CRISIS. THE PROBLEM OF ENERGY IS BUT ONE OF MANY
S
ON THE INTERNATIONAL ECONOMIC AGENDA. BUT IT IS INDEED
CENTRAL TO THE WORLD ECONOMY, AND AS THIS CONFERENCE
DEMONSTRATES IT HAS LED US TO A MUCH BROADER CONSIDERA-
TION OF THE RANGE OF RELATED ISSUES.
FULFILLMENT OF THE ASPIRATIONS OF MANKIND TO SPREAD
WELLBEING AND EXPAND HUMAN OPPORTUNITIES
DEPENDS
ON
OUR CAPACITY TO HARNESS THE WORLD'S ENERGY RESOURCES.
N
THE APPLICATION OF SCIENCE AND TECHNOLOGY TO TAP THE
VAST ENERGY POTENTIAL IMPRIOSONED IN THE SOIL OF THE EARTH.
RADIATED BY THE SUN, GENERATED BY THE MOVEMENT OF WINn
AND WATER ACROSS THE EARTH'S SURFACE, OR LOCKED IN THE
CORE OF MATTER ITSELF, IS FUNDAMENTAL TO THE HOPES OF
MILLIONS TO PULL THEMSELVES ABOVE A BARE STRUGGLE FOR
EXISTENCE.
THE GLOBAL ECONOMY WAD EXPANDED STNCE WORLD WAR II
ON THE BASIS OF A PREDICTABLE PRICE AND SUPPLY OF ENERGY.
IT WAS THE ESSENTIAL RESOURCE IN ALL COUNTRIES FOR
S
FORU
CONFIDENTIAL E
&
GERALD
LIBRARY
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
N
OF STATE
Department AFF 757 03 57
of State 1852
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL
NOD508
PAGE 01 TOKYO 00002 0803427
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C 0 N F I B E N A L SEC 2 OF 11 TOKYO 17378
NODIS
ECONOMIC GROWTH, INDUSTRIALIZATION AND DEVELOPMENT.
THEREFORE, THE 1973 ENERGY CRISIS THE 500 PERCENT INCREASE
IN THE PRICE OF OIL--- WAS AN ABRUPT AND ARBITRARY
BLOW TO GLOBAL STABILITY AND PROSPERITY. WE ARE ONLY
NOW RECOVERING FROM ITS EFFECTS. INFLATION AND
RECESSION WERE SIGNIFICANTLY ACCELERATED IN THE INDUS-
TRIALIZED WORLD. THE POOREST OF THE DEVELOPING COUNTRIES,
S
STRUGGLING TO MAKE MODEST STEPS TOWARD PROGRESS, WERE
DEALT THE CRUELEST BLOW OF ALL. THEIR HOPES OF
INDUSTRIALIZATION WERE POSTPONED, THEIR DEVELOPMENT
PLANNING DISRUPTED, AND EVEN THEIR AGRICULTURAL PRO-
DUCTION UNDERMINED BY THE INCREASED COST OF PETROCHEMICAL
FERTILIZERS, ECONOMIC JUSTICE, IN WHOSE NAME THESE
ACTIONS WERE TAKEN, WAS HARDLY SERVED FOR THE VAST MAJORITY
OF THE DEVELOPING WORLD.
IT IS THUS NO ACCIDENT THAT ENERGY HAS BECOME A
ZODIU
CONCERN OF INTERNATIONAL DIPLOMACY.
SOME NATIONS ARE PARTICULARLY WELL ENDOWED WITH
ENERGY RESOURCES, SOME HAVE THE SCIENTIFIC AND TECH-
NOLOGICAL EXPERTISE REQUIRED TO EXPLORE AND UTILIZE
THAT POLENTIAL. BUT THE INTERNATIONAL FLOW OF INVEST-
MENT CAPITAL, DEVELOPED ENERGY RESOURCES, AND GOODS
PRODUCED BY OR DERIVED FROM FUELS, HAS BECOME IN
EFFECT AN ENERGY SYSTEM, WHICH SUSTAINS THE GLOBAL
ECONOMY AND ALL OUR ECONOMIES. OUR INTERDEPENDENCE
COMPELS OUR COOPERATION AND COMMON PROGRESS, OR WE WILL
SLIDE TOWARDS CONFLICT AND COMMON DIFFICULTY.
Fune
THIS IS THE ATTITUDE OF THE UNITER STATES. WE
&
CONFIDEN- IAL
GERALD
JANARY
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
N
DEPARTMENT OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTI
0800024 20000 20 PAGE
RECOGNIZE OUR OWN RESPONSIBILITY:
S
-- THE UNITED STATE HAS MUCH TO OFFER. WE HAVE
PRODUCED MORE ENERGY THAN ANY OTHER NATION IN THE
HISTORY OF MANKIND. OUR ENERGY SCIENCE AND TECHNOLOGY
ARE THE MOST ADVANCED, AND WE HAVE TREMENDOUS POTENTIAL
FOR FUTURE DEVELOPMENT ON OUR OWN TERRITORY OR OFF OUR
SHORES.
-- THE UNITED STATES ALSO HAS MUCH TO GAIN. OUR
N
ENERGY NEEDS ARE THE WORLD'S LARGEST. OUR ABILITY TO
PROVIDE ADEQUATE LIVING STANDARDS FOR ALL OUR CITIZENS
DEPENDS ON GREATER ENERGY PRODUCTION AND MORE EFFICIENT
FLOW AND UST OF THE WORLD'S ENERGY RESOURCES.
THE UNITED STATES RESPONSE TO THE ENERGY CRISIS WAS,
FIRST OF ALL, TO REACH A CONSENSUS AMONG THE INDUSTRIALI-
ZED NATIONS WHOSE GREAT ENERGY NEEDS MADE THEM THE MOST
DIRECTLY AFFECTED BY THE EMBARGO AND MASSIVE PRICE RISES.
WE OWRKED TOGETHER TO ASSURE BASIC SECURITY AGAINST
ARBITRARY DISRUPTIONS IN OIL SUPPLY AND AGAINST FINAN-
CIAL CRISIS INDUCED BY THE FLOOD OF PETRODOLLARS. WE
PLEDGED OURSELVES TO LONG-TERM COOPERATION IN ENERGY
S
CONSERVATION AND IN DEVELOPMENT OF ALTERNATE ENERGY
SUPPLIES. WE AGREED NOT TO RESORT TO PROTECTIONIST
MEASURES WHICH WOULD FURTHER CONSTRICT TRADE: WE BEGAN
UNPRECEDENTED COORDINATION OF OUR ECONOMIC POLICIES
TO PROMOTE RECOVERY FROM RECESSION WITHOUT INFLATION,
AS DRAMATIZED IN THE RECENT ECONOMIC SUMMIT AT RAMBOUILLET.
THESE ACTIONS WERE NOT TAKEN IN A SPIRIT OF COM-
N
FRONTATION. THEY WERE PRUDENT STEPS OF SELF PROTECTION,
OR STEPS TO PROMOTE THE REVIVAL OF WORLDWIDE PROS-
PERITY. THEY COME INT EFFECT ONLY IF A CONFRONTATION
IS PROVOKED BY OTHERS. BUT THE COLLABORATION OF THE
INDUSTRIAL COUNTRIES HAS ALWAYS BEEN CONCEIVED AS ONLY
PART OF A LARGER PROGRAM FOR ECONOMIC PROGRESS. INDEED,
D
ONE CENTRAL TOPIC OF THHE DIALOGUE OF THE INDUSTRIALIZED
COUNTRIES WAS WHAT COMMON APPROACHES WE SHOULD TAKE TO
CONTRIBUTE TO A BROADER COOPERATION BETWEEN PRODUCERS AND
CONSUMERS AND BETWEEN INDUSTRIALIZED AND DEVELOPING
NATIONS. THE ATTITUDE OF ALL THE INDUSTRIAL NATIONS
S
HAS ALWAYS BEEN THAT WE SHOULD DEVELOP CLOSE AND
CONSTRUCTIVE LONG TERM ECONOMIC TIES WITH PRODUCING
NATIONS THAT OUR INVESTMENT AND TECHNICAL SUPPORT SHOULD
CONI IDENTIAL THE
FORD
&
GERALD
LIBRARY
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
ZOPIN
DEPARTMENT OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL
PAGE 03 TOKYO 00002 0803427
CONTRIBUTE TO THEIR development, AND THAT THEIR PROSPERITY
SHOULD CONTRIBUTE TO THE WORLDWIDE EXPANSION OF TRADE.
WE RECOGNIZED THAT AN ECONOMIC SYSTEM WHICH FOSTERED
THE PROSPERITY OF ALL WAS THE ONLY DURABLE SOLUTION TO
THE PROBLEM OF OUR RELATIONS. FOR EACH TRULY HAD A
STAKE IN THE PROGRESS OF OTHERS.
THE UNITED STATES THEREFORE HAS MADE CLEAR SINCE
DECEMBER 1973 THAT IT WAS WORKING TOWARD A DIALOGUE
BETWEEN CONSUMERS AND PRODUCERS. LAST APRIL, AT THE
INVITATION OF THE PRESIDENT OF FRANCE, WE AGREED TO BEGIN
ZODIU
ZODIU
Fune
CONT IDENTIAL HH
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NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
N
8 DEC 752 04 12
001853
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
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N00513
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E 0 N F I D E N 1 L SEC 3 OF 11 TOKYO 17378
NODIS
THIS DIALOGUE. IT WAS TIME FOR THE WORLD COMMUNITY TO
ACT.
THE WORLD WAS ONLY BEGINNING TO RECOVER FROM THE
GREATEST GLOBAL RECESSION SINCE THE THIRTIES, BROUGHT
ABOUT IN PART BY THE MASSIVE INCREASES IN THE PRICE
OF OIL. IT WAS CLEAR THAT ADDITIONAL INCREASES WOULD
ONLY HAMPER ECONOMIC RECOVERY, COMPOUND THE INTERNAL
S
DIFFICULTIES OF MANY COUNTRIES, WEAKEN THE ABILITY
OF THE ADVANCED NATIONS TO ASSIST THE DEVELOPING, AND
STRAIN THE FABRIC OF INTERNATIONAL COOPERATION.
ACCORDINGLY, THE INDUSTRIAL NATIONS WANTED THE DIALOGUE
TO FOCUS ON ENERGY. THE OIL-PRODUCING NATIONS AND THOSE
DEVELOPING NATIONS THAT WERE NOT OIL PRODUCERS WANTED
TO GIVE EQUAL PRIORITY TO A WIDE RANGE OF DEVELOPMENT
N
ISSUES, INCLUDING PRICES AND MARKETS FOR OTHER RAW
MATERIALS AND INTERNATIONAL FINANCIAL QUESTIONS,
THE INDUSTRIAL NATIONS, ON THE OTHER HAND, SAW THESE
O
ISSUES AS TOO VARIED AND COMPLEX TO BE RESOLVED EFFECTIVELY
IN A S GLE FORUM. A PREPARATORY CONFERENCE CALLED IN
APRIL THEREFORE FAILED BECAUSE OF DISAGREEMENT OVER THE
D
PROPER AGENDA.
IN THE INTERVENING MONTHS, THE UNITED STATES, TO
DEMONSTRATE ITS DESIRE FOR A CONSTRUCTIVE AND COOPERATIVE
SOLUTION, ACCEPTED THE PROPOSITION THAT THE NEEDS OF THE
LESS DEVELOPED COUNTRIES MUST BE ADDRESSED IN ANY DIS-
CUSSION OF GLOBAL ECONOMIC PROBLEMS, INCLUDING THOSE
S
CENTERING ON ENERGY. TO THIS END, IN SEPTEMBER, BEFORE
THE SEVENTH SPECIAL SESSION OF THE UNITED NATIONS
FORD
&
CONFIDENTIAL
GERALD
LIBRARY
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
N
DEPARTMENT
OF
STATE
Department of State
UNITED
AMERICA
TELEGRAM
STATES OF
CONFIDENTIAL
PAGE 02 TOKYO 00003 0803594
GENERAL ASSEMBLY, THE UNITED STATES MADE A SERIES OF
S
CONCRETE PROPOSALS IN MANY AREAS: -- TO ENSURE THE
ECONOMIC SECURITY OF DEVELOPING COUNTRIES AGAINST
SHORTFALLS IN EXPORT EARNINGS, FOOD SHORTAGES, AND
NATURAL DISASTERS,
-- TO ACCELERATE THEIR ECONOMIC GROWTH BY THEIR
ACCESS TO CAPITAL MARKETS, TECHNOLOGY, AND FOREIGN
INVESTMENT,
N
-- TO IMPROVE THEIR OPPORTUNITIES IN WORLD COMMERCE.
-- To BETTER THE CONDITIONS OF TRADE AND INVESTMENT IN
KEY. COMMODITIES ON WHICH MANY OF THEIR ECONOMICS ARE
DEPENDENT AND TO SET AN EXAMPLE IN THE VITAL AREA OF
FOOD,
-- AND TO ADDRESS THE ESPECIALLY URGENT NEEnS OF
THE POOREST COUNTRIES DEVASTATED BY THE CURRENT
ECONOMIC CONDITIONS.
TODAYIS DIALOGUE
SO MY COUNTRY IS NOW COMMITTED TO A WIDE RANGING
AND SERIOUS PROGRAM OF COOPERATION WITH THE DEVELOPING
WORLD.
S
THE UNITED STATES UNDERSTANDS FULL WELL -- AND HAS
SHOWN IN ITS MANY PROPOSALS -- THAT THIS DIALOGUE MUST
ENCUMPASS SERIOUS DISCUSSION OF ISSUES OF CONCERN TO ALL
SIDES. FOR US, THIS CLEARLY REQUIRES A DISCUSSION OF
THE EFFECTS OF ENERGY PRICES ON THE WORLD ECONOMY. CO-
OPERATIVE ATTITUDES DEPEND ON MUTUAL RESPECT, MUTUAL
UNDERSTANDING, AND RECIPROCITY.
N
THIS CONFERENCE, AND THE FOUR COMMISSIONS WHICH IT
WILL LAUNCH, CAN BE AN IMPORTANT STEP IN THE EVOLUTION
OF INTERNATIONAL COOPERATION.
A GENERATION OF GLOBAL ECONOMIC EXPANSION SINCE
WORLD WAR II HAS ITSELF TRANSFORMED THE WORLD ECONOMY. NEW
D
PARTICIPANTS, NEW PRACTICES, AND NEW DEMANDS ON THE SYSTEM
HAVE GIVEN RISE TO DISPUTES OVER ECONOM,C ISSUES. THIS
MEETING COMES AT A TIME WHEN NATIONS ARE CHALLENGED TO
RESTORE STABILITY TO THE ECONOMIC SYSTEM, THROUGH POLITICAL
DECISION. THE WORLD MUST:
S
-- MAKE POSSIBLE THE EARLY RESTORATION OF WORLDWIDE
ECONOMIC GROWTH, WITHOUT INFLATION:
-- ACCOMMODATE THE SUDDEN MASSIVE TRANSFER OF WEALTH
FORD
&
CONFIDENTIAL
GERALD
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NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
ZOPIN
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL
PAGE a3 TOKYO 00003 0803597
TO THE OIL PRODUCERS THAT HAS OCCURRED SINCE THE FALL
OF 1973, WITH ITS IMPACT ON TRADE AND INVESTMENT
-- RESTORE THE MOMENTUM OF THE ENORMOUSLY COMPLEX
TASK OF ECONOMIC DEVELOPMENT, FOR COUNTRIES THAT
DIFFER WIDELY IN RESOURCES, CULTURES AND SOCIAL SYSTEMS;
-- ADDRESS THE DESPAIR AND POVERTY THAT ARE THE HUMAN
COSTS OF THIS ECONOMIC CRISIS IN THE MOST SERIOUSLY
AFFECTED NATIONS TODAY;
-- ENSURE THE STEADY DEVELOPMENT OF THE WORLD'S
LIMITED NATURAL RESOURCES FOR THE BENEFIT OF MANKIND,
WITH MORE EFFECTIVE MARKETS FOR RAW MATERIALS, AND
ZODIU
SPECIAL PRIORITY FOR CIVILIZATION'S TWO MOST CRITICAL
COMMODITIES, FOOD AND ENERGY,
--FOSTER THE CONTINUATION OF THE UNPRECEDENTED GROWTH
IN WORLD TRADE, INVESTMENT, LABOR MOBILITY, TRANSPORTA-
TION AND COMMUNICATION;
ZOPIN
CONF IDEN IAL
FORD
&
GERALD
LIBRARY
NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
ZOPIN
OF STATE
Department of State
001854
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIA
N00572
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NODIS
-- EMBRACE THE ASPIRATIONS OF SCORES OF NEW NATIONS
AND NEWLY-IMPORTANT PARTICIPANTS IN A STABLE FRAMEWORK
OF COOPERATION.
THIS CONFERENCE CAN BE AN IMPORANT MECHANISM FOR
DEALING WITH ENERGY AND THE OTHER CRITICAL ECONOMIC ISSUES.
IT CAN FACILITATE PRACTICAL SOLUTIONS TO CONCRETE PROBLEMS,
AND GIVE ALL PARTICIPATING NATIONS A STAKE IN THE BENEFITS
S
OF COOPERATION. OR IT CAN BECOME ANOTHER FORUM FOR DEBATES
THAT SERVE NO PURPOSE BUT TO HARDEN POLITICAL LINES, ADDING
TO OUR PROBLEMS RATHER THAN SOLVING THEM.
THE KEY TO THE SUCCESS OF THIS DIALOGUE IS THE ATTITUDE
OF THE PARTICIPANTS. IT IS TIME TO GO BEYOND THE IDEOLOGIES
LEFT OVER FROM A PREVIOUS CENTURY THAT ARE MADE OBSOLETE
BY MODERN REALITY. THE DOCTRINE OF EXTREME NATIONALISM IS
N
DISCREDITED IN AN AGE OF GLOBAL INTERDEPENDENCE. THE DOCTRINE
OF DETERMINISM AND STRUGGLE, WHICH PROMISED ECONOMIC
JUSTICE, HAS LAGGED BEHIND IN PROVIDING FOR GROWTH AND
PROSPERITY.
AND THE MORE RECENT PHILOSOPHY OF NONALIGNMENT, WHICH
WAS DESIGNED SO THAT NEW NATIONS COULD MAKE THEIR CHOICES
FREE FROM THE PRESSURES OF COMPETING BLOCS, HAS IRONICALLY
PRODUCED A BLOC OF ITS OWN. NATIONS WITH RADICALLY DIFFERENT
ECONOMIC AND POLITICAL CONCERNS ARE COMBINED IN AN
ARTIFICIAL SOLIDARITY THAT OFTEN CLEARLY SACRIFICES PRACTICAL
NATIONAL INTERESTS.
WE MUST APPROACH OUR CHILLENGES WITH REALISM, NOT
S
RHETORIC' WEMUST OFFER OUR PFOPLES SOLUTIONS, NOT SLOGANS.
WE MUST CONSIDER ISSUES OF CONCERN TO ALL SIDES -- AND ALSO
CONF IDENTIAL
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THE NEEDS OF THER NATIONS NOT IN ATTENDANCE HERE TODAY.
THIS WILL BE THE ATTITUDE OF THE UNITED STATES.
THE WORK OF THE COMMISSIONS
THE FOUR COMMISSIONS THAT THIS CONFERENCE IS ESTABLISHING
HAVE MUCH WORK BEFORE THEM:
-- THE COMMISSION ON ENERGY SHOULD PROMOTE AN
EFFECTIVE WORLD BALANCE BETWEEN ENERGY DEMAND AND
N
SUPPLY. IT SHOULD. WORKD FOR PRACTICAL COOPERATION
AMONG INDUSTRIALIZED AND DEVELOPING COUNTRIES IN THE
DEVELOPMENT OF NEW ENERGY SUPPLIES. IT SHOULD STRIVE
TO ESTABLISH A COOPERATIVE LONG-TERM RELATIONSHIP
BETWEEN ENERGY PRODUCERS AND CONSUMERS.
--THE COMMISSION OF RAW MATERIALS SHOULD WORK TO
MODERATE THE INSTABILITY OF PRICE AND SUPPLY OF RAW
MATERIALS OF THEIR HARMFUL CONSEQUENCES FOR BOTH
PRODUCERS AND CONSUMERS. IT SHOULD seek TO ESTABLISH
THE CONDIDTIONS FOR STABLE, LONG-RUN SUPPLIES OF RAW
MATERIALS VITAL TO GLOBAL PROGRESS.
--THE COMMISSION ON DEVELOPMENT SHOULD STRIVE TO
S
IMPLEMENT THE GLOBAL CONSENSUS ON THE NEED TO ACCELERATE
ECONOMIC DEVELOPMENT AND PROGRESS IN ALL NATIONS, BUT
ESPECIALLY THE POOREST. IN PARTICULAR, IT SHOULD
BRING TOGETHER INDUSTRIAL NATIONS AND OIL-WEALTHY
NATIONS TO PROVIDE FINANCIAL SUPPORT FOR THE DEVELOPMENT
INITIATIVES OF THE UNITED NATIONS SEVENTH SPECIAL
N
--THE COMMISSION ON FINANCE SHOULD ADDRESS FINANCIAL
ISSUES AS THEY RELATE TO THE WORK OF THE OTHER THREE
COMMISSIONS. IT SHOULD SEEK TO BUILD A SENSE OF
SHARED FINANCIAL RESPONSIBILITY FOR THE HEALTH AND
GROWN OF THE INTERNATIONAL ECONOMY.
WITHIN EACH OF THE COMMISSIONS WE HOPE TO BRING TO
REALITY THE JOINT RESOLVE OF THE SEVENTH SPECIAL SESSION.
WITH A COOPERATIVE APPROACH, THE COMMISSIONS COULD MAKE AN
IMPORTANT AND LASTING CONTRIBUTION. THEY CAN GIVE DIRECTION
AND IMPETUS TO ELATED ACTIVITY IN OTHER FORUMS. THEY COULD
SERVE AS CLEARING HOUSES FOR INFORMATION AND ACTIVITIES OF
OTHER ORGANI DOING SIMILAR WORK. THEY COULD IDENTIFY
S
AREAS WHERE NECESSARY WORK IS NOT BEING DONE, AND DEVISE
NEW INITIATIVES WHERE NEEDED.
FORD
CONF IDENT IAL
&
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NOT TO BE REPRODUCED WITHOUT THE AUTHORIZATION OF THE EXECUTIVE SECRETARY
ZOPIU
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
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PAGE a3 TOKYO 17378 04 OF 11 0803577
IN THE CONTEXT OF THE FOUR COMMISSIONS, THE UNITED
STATES WILL SUPPORT PROGRESS ON A BROAD RANGE OF TOPICS.
BUT WE HAVE A SPECIAL INTEREST IN THE FOLLOWING AREAS:
-- FIRST, THE SECURITY OF SUPPLY AND PRICE OF OIL AS
IT IT AFFECTS THE INTERNATIONAL ECONOMY:
-- SECOND, THE MASSIVE BALANCE OF PAYMENTS PROBLEMS OF
DEVELOPING COUNTRIES:
-- THIRD, THE CONDIDTIONS OF INTERNATIONAL INVESTMENT:
--FOURTH, PROBLEMS OF TRADE IN KEY COMMODITIES,
ESPECIALLY FOOD: AND
-- FIFTH, THE URGENTLY COMPELLING PROBLEMS OF THE
ZODIU
POOREST COUNTRIES.
LET ME DISCUSS EACH OF THESE IN TURN.
ENERGY
FIRST, ENERGY, THE ORIGIN OF THIS CONFERENCE WAS THE
DISRUPTION IN OIL SUPPLY IN THE FALL AND WINTER OF 1973
AND THE MASSIVE INCREASES IN THE PRICE THAT FOLLOWED. THIS
CRISIS BROUGHT TO THE ATTENTION OF us ALL THE NEED FOR MORE
EFFECTIVE WORLD MANAGEMENT OF ENERGY PROBLEMS, NO OTHER
CHALLENGE TO OUR GLOBAL ECONOMIC SYSTEM IS MORE FAR-
REACHING, NO ISSUE IS MORE BASIC TO OUR COLLECTIVE FUTURE.
THE SHEER MAGNITUDE OF THE ENERGY QUESTIONS COMPELS US TO
COOPERATION.
ZODIU
FOHD
CONFIDENTIAL I
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Department 750f State
UNITED STATES OF AMERICA
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LET ME STATE THE THREE MOST PRESSING ISSUES WE FACE
IN THIS AREA.
FIRST, IN OUR VIEW IT IS ESSENTIAL THAT WE REACH A
COMMON EVALUATION OF THE RELATIONSHIP BETWEEN
CHANGES IN ENERGY PRICES AND THE STABILITY AND PERFORMANCE
S
OF THE WORLD ECONOMY. WE MUST REACH A CONSENSUS THAT ENERGY
PRODUCERS HAVE A RESPONSIBILITY TO THE GLOBAL ECONOMY, AND
ALSO THAT GLOBAL ECONOMIC CONDITIONS CAN LEGITIMATELY HAVE
AN IMPACT ON ENERGY PRICES. WE CAN AGREE ON PROCEDURES THAT
ENABLE ALL CONCERNED TO HAVE A VOICE IN DETERMINING THE PRICE
AND CONDITIONS OF TRADE IN ENERGY.
THE UNITED STATES WILL APPROACH THESE ISSUES IN A
COOPERATIVE SPIRIT. BUT WE CANNOT AGREE THAT THE CURRENT
ZODIU
PRICE OF OIL IS ECONOMICALLY JUSTIFIED. FOR THE INDUSTRI-
ALIZED COUNTRIES THE ABRUPT PRICE INCREASE HAS BEEN A MAJOR
FACTOR IN RATES OF INFLATION AND UNEMPLOYMENT UNPRECEDENTED
SINCE THE 1930'S. THE OIL PRICES HAVE CREATED MASSIVE
BALANCE OF PAYMENTS DEFICITS, INDIRECTLY THROUGH GLOBAL
RECESSION AND DIRECTLY THROUGH HIGHER-PRICED OIL IMPORTS.
AT A HIGH COST TO THE WELLBEING OF THEIR PEOPLES, THE
INDUSTRIAL COUNTRIES HAVE, ON THE WHOLE, PUT THEIR PAYMENTS
BACK IN BALANCE OVER THE LAST TWO YEARS; THUS THE BURDEN OF
THE $60 (?) BILLION PETRODOLLAR DEFICIT IS NOW SUFFERE-
ALMOST TOTALLY BY THE POORER neveloping COUNTRIES WHICH
HAVE NO OIL RESOURCES. THEY CAN MEET THESE DEFICITS ONLY
FORD
BY CUTTING BACK ON CRITICAL IMPORTS OR BY EXTENSIVE
&
BORROWING, WHICH AMOUNTS TO MORTGAGING THEIR FUTURE PROS-
CONF IDENTIAL
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ZOPIU
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UNITED STATES OF AMERICA
TELEGRAM
CONF IDENTIAL H
PAGE 02 TOKYO 00005 0804207
PECTS FOR DEVELOPMENT. DEVELOPING COUNTRIES BY DEFINITION
TEND TO HAVE LESS OF A MARGIN TO REDUCE CONSUMPTION, OR TO
RESTRUCTURE ENERGY USE, AND TO SHIFT TO ALTERNATIVE SOURCES.
A LOWER OIL PRICE WOULD MAKE POSSIBLE MORE RAPID
ECONOMIC RECOVERY IN THE INDUSTRIALIZED WORLD AND AROUND THE
WORLD. AND IT WOULD ASSIST THE DEVELOPING COUNTRIE BY
EASING THEIR BURDEN AND INCREASING FOREIGN DEMAND FOR
THEIR EXPORTS. LOWER PRICES WOULD ALSO BENEFIT PRODUCER
NATIONS BY EASING THE NECESSITY FOR CONSUMING COUNTRIES TO
DEVELOP ALTERNATIVE SUPPLY SOURCES OVER THE LONG TERM. ANn
FURTHER PRICE INCREASES WOULD BE A BLOW TO A VERY FRAGILE
ZOPIU
WORLD RECOVERY, TO THE DETRIMENT OF EVERY COUNTRY.
WE EXPECT EXTENDED DISCUSSION OF THIS ISSUE. WE ARE
PREPARED TO MAKE A SERIOUS, CONCILIATORY AND SUSTAINED EFFORT
TO REACH AN UNDERSTANDING.
SECONDLY, IT IS IMPERATIVE THAT WE COLLABORATE TO FIND
NEW SOURCES OF ENERGY AND TO INTENSIFY OUR CONSERVATION.
ALL CONSUMING COUNTRIES, DEVELOPED AND DEVELOPING, MUST USE
ENERGY MORE EFFICIENTLY AND DEVELOP MORE ABUNDANT SUPPLIES.
PRODUCERS NEED TO PREPARE FOR THE DAY WHEN THEY EXHAUST THEIR
EASILY ACCESSIBLE OIL RESERVES. A STABLE LONG-TERM PRICE
OF OIL IS ESSENTIAL TO ATTRACT THE INVESTMENT NEEDED FOR
ENERGY DEVELOPMENT.
AT THE SPECIAL SESSION OF THE GENERAL ASSEMBLY, WE
PROPOSED AN INTERNATIONAL ENERGY INSTITUTE. THROUGH SUCH AN
ORGANIZATION, THE DEVELOPMENT, DEVELOPING, AND OPEC COUNTRIES
WOULD ASSIST POORER DEVELOPING COUNTRIES TO MEET THEIR
ENERGY NEEDS, THE INSTITUDE COULD HELP ASSESS THESE
COUNTRIES' ENERGY RESOURCES AND REQUIREMENTS, USING THE MOST
ZOPIN
ADVANCED TECHNIQUES OF ANALYSIS. IT WOULD BE STAFFED BY
EXPERTS DRAWN FROM GOVERNMENT, INDUSTRY, AND ACADEMIC LIFE
IN BOTH INDUSTRIALIZED AND DEVELOPING COUNTRIES. IT WOULD
PROVIDE TRAINING FOR LOCAL AND REGIONAL TECHNICIANS AND
SPECIALISTS IN ENERGY PROBLEMS.
THE INSTITUTE'S AIM WOULD BE TO HELP DEVELOPING
COUNTRIES UTILIZE ENERGY MORE EFFICIENTLY AND INCREASE
PRODUCTION AND IMPROVE ALLOCATION AND DISTRIBUTION OF
EXISTING ENERGY RESOURCES. IT COULD IDENTIFY EXISTING
OR NEW ENERGY TECHNOLOGIES MOST RELEVANT TO THE SPECIAL NEEDS
OF DEVELOPING COUNTRIES. IT COULD BECOME in CENTRAL POINT
OF CONTACT WHERE POLICYMAKERS AND TECHNICAL EXPERTS COULD
CONF IDENTIAL
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EXCHANGE IDEAS WITH THEIR COUNTERPARTS.
S
IN PARALLEL WITH THIS, THE UNITED STATES HAS URGED
OTHER MEANS FOR THE INDUSTRIALIZED NATIONS TO ASSIST
DEVELOPING STATES TO FIND AND EXPLOIT NEW ENERGY SOURCES
AND TO CONSERVE THEIR NATIONAL PATRIMONY. WE INT D TO
ADVANCE THESE PROPOSALS IN THE ENERGY COMMISSION. WE
ANTICIPATE A FULL EXCHANGE OF VIEWS ON THEIR SCOPE AND
SUBSTANCE.
ZODIU
ZODIU
CONF IDENTIAL HIS
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OF STATE
8 DEC 757 06 10
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Department of State
UNITED OF AMERICA
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SECTION 6 OF 11 TOKYO 17378
NODIS
THIRDLY, THE UNITED STATES HOPES TO FOSTER THE PARTITICI-
PATION AND CONTRIBUTION OF THE DIL-PRODUCING COUNTRIES
IN THE INERNATIONAL ECONOMY. AN EXTRAORDINARY TRANSFER
OF WEALTH HAS TAKEN PLACE. IT IS IN THE MUTUAL INTEREST
THAT THE DIL-PRODUCING NATIONS BECOME MEMBERS, NOT DIS-
RPUTERS, OF THE WORLD ECONOMIC SYSTEM: THAT INVESTMENT
AND THE LATEST TECHNOLOGY BE MADE AVAILABLE ON A REIM-
BURSALE BASIS FOR DEVELOPMENT PROGRAMS: AND THAT THE
S
FLOW OF GOODS AND SERVICES BE ENHANCED BETWEEN PRODUCING
AND CONSUMING COUNTRIES.
WE RELIEVE THAT THESE THREE ISSUES---A BETTER UNDERSTANDING
OF THE FFECTS OF PRICE, COOPERATION ON NEW PRODUCTION AND
ON CONSERVATION, AND ORDERLY INTERGRATION OF OPEC ECONOMIES
INTO THE GLOBAL ECONOMY ARE PRIORITIES FOR FUTURE
DISCUSSION IN THE ENERGY FORUM.
N
BALANCE OF PAYMENTS PROBLEMS
CLOSELY RELATED TO THE ENERGY ISSUE ARE THE URGENT
BALANCE OF PAYMENTS PROBLEMS OF DEVELOPING COUNTRIES.
CURRENT PROJECTIONS INDICATE THAT THE DEVELOPING WORLD
IN 1976 WILL BE COLLECTIVELY IN DEFICIT БҮ OVER 330 BILLION.
BILATERAL AND MULTILATERAL AID, ALONG WITH DIRECT INVEST-
MENT, WILL FINACE ROUGHLY $25 BILLION OF THIS. BORROWING
FROM INTERNATIONAL CAPITAL MARKETS MAY NOT MAKE UP THE
REMAINDER. THEREFORE, SOME COUNTRIES WILL BE FORCED TO
S
DISRUPT DEVELOPMENT PLANS BY FURTHER SQUEEZING IMPORTS
OR BY DEFAULTING OR SEEKING TO RESCHEDULE THEIR DEBTS.
FORD
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ZOPIU
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Department of State
UNITED OF AMERICA
TELEGRAM
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PAGE 02 TOKYO 17378 06 OF 11 080418Z
THE DEFICITS OF THE DEVELOPING COUNTRIES ARE THUS A
DANGER NOT ONLY TO THEIR OWN WELLBEING BUT ALSO TO THE
STABILITY OF THE INERNATIONAL FINANCIAL SYSTEM AND TO
THE ECONOMIC SECURITY OF THE INDUSTRIALIZED NATIONS.
WE MUST GIVE IMMEDIATE ATTENTION TO THIS PROBLEM.
AT THE UNITED NATIONS WE PUT FORWARD MEASURES TO ADDRESS
THE FINANCIAL NEEDS OF THE DEVELOPING COUNTRIES FOR THE
LONGER TERM. WE PROPOSED THE CREATION IN THE INTERNATIONAL
N
MONETARY FUND OF A NEW DEVELOPMENT SECURITY FACILITY
TO STABILIZE OVERALL EARNINGS IN THE FACE OF SHARP FLUCTUA-
TIONS IN EXPORT INCOME. IT WOULD PROVIDE ASSISTANCE TO
DEVELOPING COUNTRIES TO FINANCE SHORTFALLS IN EXPORT EARN-
INGS, UNLESS THOSE SHORTFALLS WERE CAUSED BY THEIR OWN
ACTS. WE ARE NOW WORKING WITH OTHER COUNTRIES AND THE
IMF TO MAKE THIS PROPOSAL A REALITY.
WE ALSO RECOGNIZED THAT DEVELOPING COUNTRIES NEED
MUCH BETTER ACCESS TO WORLD CAPITAL MARKETS. WE SUGGESTED
THAT TECHNICAL ASSISTANCE AND EXPERTISE BE PROVIDED TO
DEVELOPING COUNTRIES THAT ARE READYTO ENTER LONG-TERM
PRIVATE CAPITAL MARKETS FOR THE FIRST TIME. THE UNITED
S
STATES, FOR ITS PART, IS DESIGNING AN APPROPRIATE TECHNICAL
ASSISTANCE PROGRAM WHICH WILL BEGIN OPERATINGIN THIS
FISCAL YEAR. WE HOPE OTHERS WILL FOLLOW SUIT.
WE ALSO PROPOSED A MAJOR EXPANSIONOF THE RESOURCES
OF THE WORLD BANK'SINTERNATIONAL FINANCE CORPORATION
TO ENHANCE DEVELOPING COUNTRIES' COMPETITIVENESS FOR CAPITAL.
WE FURTHER RECOMMENDED CREATION OF AN INTERNATIONAL INVEST-
N
MENT TRUST TO MOBILIZE PORTFOLIO CAPITAL FORINVESTMENT
IN LOCAL ENTERPRISES. AND WE PLEDGED TO CONTRIBUTE TO
THE WORK OF THE IMF/WORLD BANK DEVELOPMENT COMMITTEE TO
ASSIST DEVELOPING COUNTRIES IN THEIR DIRECT BORROWING
IN CAPITAL MARKETS.
THIS CONFERENCE HAS THE OPPORTUNITY TO MAKE FURTHER
PROGRESS IN THESE AREAS.
BUT OUR PRIORITY MUST NOW BE ON THE IMMEDIATE FUTURE.
A MULTITUDE OF IDEAS AND PROPOSALS ARE ALREADY BEFORE US.
LET US ADDRESS STEPS THAT CAN BE TAKEN NOW.
TO ACHIEVE IMMEDIATE MOMENTUM. MY COUNTRY PROPOSES
THREE NEW MEANS FOR THE IMF TO EXPAND SIGNIFICANTLY THE
BALANCE OF PAYMENTS FINANCING THAT IT PROVIDES TO DEVELOPING
FORD
COUNTRIES:
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OF STATE
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UNITED STATES OF AMERICA
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PAGE 00 TOKYO 17378 06 OF 11 0804187
-- FIRST, THE IMF SHOULD PROVIDE DEVELOPING COUNTRIES
WITH GREATER ACCESS TO REGULAR DRAWINGSFROM THE FUND'S
RESOURCES. THE UNITED STATES MADE PROPOSALS ALONG THESE
LINES LATE LAST YEAR, BUT THEY HAVE NOT YET BEEN ACTED UPON.
AT PRESENT, OUTSTANDING CREDIT FROM REGULAR DRAWING IS
LIMITED TO 100 PERCENT OF A COUNTRY'S IMF QUOTA. Tmis
SHOULD BE EXPANDED TO 200 PERCENT. IN ADDITION, THERE SHOULD
BE PROVISION FOR A LARGER VOLUME OF LENDING IN A SINGLE
YEAR. THE SCOPE OF SUCH STEPS INS POTENTIALLY VERY
LARGE- POSSIBLY AROUND $8 BILLION.
-- RECONDLY, THE MEMBERS OF THE IMF SHOULD PROMPTLY
ZODIS
AGREE ON THE DETAILS OF THE TRUST FUND WHICH THE UNITED
STATES HAS PROPOSED TO PROVIDE CONCESSINAL FINANCING
ZOPIN
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ZOPIS
8 DEC 75Z 06 11
Department of State
UNITED STATES OF AMERICA
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FOR THE POOREST COUNTRIES. IT WOULD GIVE THESE COUNTRIES,
WHICH DESPERATELY NEED HELP, ADDITIONAL RESOURCES OF $1-2
BILLTON A YEAR, USING THE PROFITS FROM IMF GOLD SALES
AS WELL AS NATIONAL CONTRIBUTIONS. THE RECENT RESOLUTION
OF THE UNRELATED DISPUTE OVER IMF GOLD SHOULD MAKE FINAL
ACTION POSSIBLE ON THE TRUST FUND AT THE MEETING OF THE
IMF INTERIM COMMITTED IN JANUARY.
-- FINALLY, THE UNITED STATES PROPOSES THAT THE IMF
S
SHOULD CONSIDER CONTINUING THE EXISTING OIL FACILITY FOR
SEVERAL MORE YEARS TO LEND ONLY TO LESS DEVELOPED COUNTRIES.
THIS FACILITY WAS CREATED TO ... (ONE-SENTENCE EXPLANATION
OF IT). THE IMF SHOULD FIND IT FEASIBLE TO BORROW UP TO
$3 BILLION A YEAR FROM THE PRIVATE MARKET, AND POSSIBLY
FROM GOVERNMENTS, AND RELEND IT TO DEVELOPING COUNTRIES
ON COMMERICAL TERMS. THIS WOULD BE OF PARTICULAR BENEFIT
N
TO THE MORE DEVELOPED NATIONS IN THIS GROUP.
THESE THREE MEASURES IN COMBINATION WOULD GREATLY EASE THE
BALANCE OF PAYMENTS PROBLEMS OF THE DEVELOPING COUNTRIES.
NOT ONLY COULD THEY PROVIDE DIRECT LENDING TO THE COUNTRIES
THAT NEED IT, BUT THE VERY EXISTENCE OF SUBSTANTIAL IMF
LENDING FACILITIES WOULD BUTTRESS THE MARKET'S CONFIIDENCE
IN SUCH LENDING, PARTICULARLY FOR THE MIDDLE-INCOME COUNTRIES
THAT DEPEND HEAVILY ON PRIVATE CAPITAL.
WE CANNOT EMPHASIZE ENOUGH THE NEEn FOR IMMEDIATE
ACTION IN THIS AREA OT SUPPLEMENT THE LONGER-TERM
PROPOSALS WHICH HAVE BEEN MADE, AND WE CANNOT EMPHASIZE
ENOUGH THAT THE INDUSTRITLIZED COUNTRIES SHOULD NOT
S
BEAR THE SOLE RESPONSIBILITY FOR ASSISTANCE IN THIS AREA,
CONFIDENTIAL
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ZOPIU
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL
20000 DANOL 20 PAGE
PARTICULARLY IN VIEW OF THE OIL-RELATED ORGIN OF MUCH OF
THE PRESENT CRISIS. IT IS A COLLECTIVE OBILIGATION.
INVESTMENT AND TECHNOLOGY FOR DEVELOPMENT
THE BALANCE OF PAYMENTS DEFICITS OF THE DEVELOPING
COUNTRIES POSE A TEMPORARY PROBLEM THAT WILL MODERATE
AS THE GLOBAL ECONOMY RECOVERS FROM RECESSION. BUT
ECONOMIC DEVELOPMENT REQUIRES A SUSTAINED, LONG-RUN EFFORT
AND CONTINUOUS APPLICATION OF CAPITAL, TECHNOLOGY, MANAGE=
N
MENT AND SKILLS TO DEVELOPMENT NEEDS.
THE GREATEST PART OF THE RESOURCES REQUIRED FOR
DEVELOPMENT MUST BE GENERATED FROM WITVITHE DEVELOPING
COUNTRIES THEMSELVES. THEIR OWN POLICIES WILL DETERMINE
WHETHER THESE RESOURCES WILL BE MADE AVAILABLE AND USED
EFFECTIVELY.
BUT THE WOLD COMMUNITY HAS LONG SINCE ACKNOWLEDGED THAT
INTERNATIONAL COLLOBORATION IN SUPPORT OF THIS EFFORT
SERVES TO ENHANCE INTERNATIONAL ORDER AND HUMAN BETTERMENT.
THEREFORE, I WANT TO ADDRESS TWO SPECIFIC AREAS OF THIS
INTERNATIONAL ASSISTANCE FOR DEVELOPMENT WHICH ARE OF
SPECIAL INTEREST TO US IN THIS DIALOGUE -- INVESTMENT AND
S
TECHNOLOGY.
PRIVATE INTERNATIONAL INVESTMENT HAS ALWAYS BEEN A MAJOR
FACTOR IN THE GROWTH OF THE GLOBAL ECONOMY. MY OWN COUNTRY
BENEFITED FROM FOREIGN INVESTMENT IN ITS EARLY PERIOD OF
GROWTH. TODAY, ONE OF THE MOST IMPORTANT VEHICLES FOR
TRANSFERRING CAPITAL, TECHNOLOGY AND MANAGEMENT SKILLS ON
A MASSIVE SCALE TO WHERE THEY ARE MOST NEEDED IS THE
N
TRANSNATIONAL ENTERPRISE.
WE ALL KNOW THAT FOREIGN INVESTMENT HAS BEEN INCREASINGLY
THE SUBJECT OF CONCERN AND THE TARGET FOR NATIONAL CONTROL
IN BOTH DEVELOPED AND DEVELOPING COUNTRIES. THE ENTERPRISES
THEMSELVES ARE CAUGHT IN THE MIDDLE AND ARE FORCED TO
OPERATE IN AN UNSTABLE INVESTMENT CLIMATE, CHARACTERIZED BY
UNCERTAINTY, UNPREDICTABLE NATIONAL LEGISLATION AND FEW
ACKNOWLEDGED RULES OF THE GAME.
IN THIS CLIMATE WE ALL SUFFER. HOST COUNTRIES ARE
DEPRIVED OF THE BENEFITS OF CAPTIAL RESOURCES, TECHNOLOGY
AND MANAGEMENT WHICH THESE ENTERPRISES CAN UNIQUELY BRING,
AS WELL AS THEIR RIGHTFUL SHARE OF TAXES AND PROFITS. THE LOSS OF
THIS FOREIGN INVESTMENT IS ESPECIALLY DAMAGING IN AN ERA
CONFIDENTIAL
FORD
GERALD
AMMUNT
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ZODIU
OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIAL H
PAGE 03 TOKYO 00007 0804432
WHEN THIS FORM OF RESOURCE TRANSFER IS INCREASINGLY NEEDED
TO SUBSTITUTE OFR OFFICIAL DEVELOPMENT ASSISTANCE.
AT THE SAME TIME, THE HOME COUNTRIES ARE DEPRIVED OF THE
BENEFITS WHICH FOREIGN INVESTMENT BRINGS, SUCH AS OVERSEAS
MARKETS, INVESTMENT INCOME, THEIR FAIR SHARE OF TAXES, AND
THE ACQUISITION OF NEW IDEAS AND TECHNIQUES WHICH COMES
WITH FOREIGN CONTACT.
AS FOR THE ENTERPRISES themselves, THEIR ACTIVITIES ARE
SQUEE7ED AT BOTH ENDS, MAKING OVERSEAS INVESTMENT LESS WORTH-
WHILE TO CONTINUE.
WE MUST FACE THE REALITY THAT THE WORLD ECONOMY IS
ZODIU
INCREASINGLY DEPENDENT ON THIS INSTRUMENT OF CAPITAL TRANSFER
ZODIU
FORD
a
CONF IDENTIAL HM
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200-0
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8 DEC 75Z 06 11
001868
Department of State
UNITED OF AMERICA
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NOD520
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6 N F ENTIAL SECTION 8 OF 11 TOKYO 17378
NODIS
FOR THE ACHIEVEMENT OF OUR RESPECTIVE OBJECTIVES. PROPERLY
REGULATED, THESE ENTERPRISES ARE AN ENORMOUS -- AND
INDISPENSABLE -- INSTRUMENT FOR OUR WELL BEING, IT IS
TIME TO GO BEYOND RHETORIC TO PRACTICAL SOLUTIONS IN THE
COMMON INTEREST.
THE UNITED STATES HAS TAKEN AN ACTIVE PART IN INTER-
NATIONAL EFFORTS TO DEVISE VOLUNTARY GUIDELINES FOR THE
BEHAVIOR OF BUTH TRANSNATIONAL ENTERPRISES AND GOVERNMENTS.
S
AT THE UNITED NATIONS I STATED FOUR PRINCIPLES ON WHICH
THESE GUIDELINES SHOULD BE BASED:
-TRANSNATIONAL ENTERPRISES MUST OBEY LOCAL LAW AND
REFRAIN FROM UNLAWFUL INTERVENTION IN THE DOMESTIC AFFARIS
OF HOST COUNTRIES.
HOST GOVERNMENTS MUST TREAT THESE ENTERPRIESES
EQUITABLY, WITHOUT DISCRIMINATION AMONG THEN, AND IN
N
ACCORDANCE WITH INTERNATIONAL LAW.
BTH GOVERNMENTS AND BUSINESS MUST RESPECT THE CON-
TRACTUAL OBLIGATIONS THEY FREELY UNDERTAKE.
--PRINCIPLES FOR TRANSNATIONAL ENTERPRISES SHOULD
APPLY TO DOMESTIC DNTERPRISES WHERE RELEVANT.
BUT OUR EFFORTS SHOULD NOT BE LIMITED ONLY TO GENERAL
GUIDELINES FORINVESTMENT. WE BELIEVE AT LEAST TWO SPECIFIC
ISSUES SHOULD ALSO BE ADDRESSED IN THE CONTEXT OF THE
DIALOGUE WE ARE NOW UNDERTAKING.
TAXATION IS ONE SUCH AREA. BECAUSE THEY OPERATE IN
MULTIPLE JURISDICTIONS, TRANSNATIONAL ENTERPRISES ARE
FREQUENTLY EITHER OVERTAXED OR UNDERTAXED. GOVERNMENTS OFTEN
S
COMPETE FOR FOREIGN INVESTMENT BY OFFERING UNNECESSARY TAX
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ADVANTAGES: SOMETIMES EITHER GOVERNMENT OR BUSINESS IS
UNJUSTLY TREATED. THE RESULT IN EITHER CASE IS THAT
INVESTMENT PATTERNS ARE DISTORTED. WE MUST FIND WAYS TO
ENABLE BOTH HOST AND HOME COUNTRIES TO COORDINATE THEIR TAX
POLICIES AND MAKE THEM MORE EQUITABLE TO EACH OTHER AND TO
PRODUCTIVE ENTERPRISES. PROPER AND FAIR TAXATION IS A
NECESSARY COMPONENT IN THE MANAGEMENT OF MAN'S INTERNATIONAL
ECONOMIC AFFAIRS.
A SECOND AREAS SUITED FOR IMMEDIATE ACTION IS BETTER
N
INTERGOVERNMENTAL CONSULTATION ON INVESTMENT DISPUTES. THIS
IS NOT ONLY IMPORTANT TO INDUSTRIAL COUNTRIES: IT IS
ESPECIALLY IMPORTANT TO DEVELOPING COUNTRIES WHOSE PROGRESS
IS DEPENDENT ON A CONSTANT FLOW OF INVESTMENT. ALTHOUGH AD
HOC ARRANGEMENTS CAN BE SUCCESSFUL, A LACK OF ACCEPTABLE
RECOGNIZED PROCEDURES AND STANDARDS CAN CAUSE UNNECESSARY
DIFFICULTY, DELAY, AND FRICTION. IT IS TIME TO DEVELOP
GENERALLY ACCEPTED INTERNATIONAL RULES FOR DISPUTE SETTLE=
MENT, ARBITRATION OF DIFFERENCES, AND OTHER GUIDELINES FOR
DEALING WITH PROBLEMS ARISING BETWEEN GOVERMENT AND ENTER-
PRISES. THE UNITD STATES RECOMMENDS THAT THE WORLD BANKIS
INTERNATIONAL CENTER FOR DISPUTE SETTLEMENT BE GIVEN A
S
GREATER ROLE IN SOLVING IMPORTANT INVESTMENT CONTROVERSIES.
A COOPERATIVE APPROACH ON THESE INVESTMENT ISSUES IS A
MAJOR TEST OF OUR ABILITY TO MANAGE MANKIND'S ECONOMIC
FUTURE CONSTRUCTIVELY AND PRAGMATICALLY.
INTERNATIONAL ASSISTANCE FOR DEVELOPMENT MUST ALSO FOCUS
ON THE TASK OF TECHNOLOGICAL DEVELOPMENT. THE ADVANCEMENT
N
AND APPLICATION OF INDIGENOUS TECHNOLOGY, AND THE TRANSFER
OF TECHNOLOGY FROM OUTSIDE, CAN ACCELERATE ECONOMIC GRWOTH
IF LOCAL SKILLS CAN ALSO BE DEVELOPED. LOCAL ADMINISTRATION
HAS THE RESPONSIBILITY TO MAKE INFORMED AND APPROPRIATE
CHOICES OF TECHNOLOGY, TO ADAPT IT TO LOCAL NEEDS AND
CONDITIONS, AND TO MANAGE ITS APPLICATION EFFICIENTLY.
D
THE GREAT BULK OF TECHNOLOGY TRANSFER IS LIKELY TO TAKE
PLACE THROUGH INTERNATIONAL INVESTMENT AND THE OPEATIONS
OF TRANSNATIONAL ENTERPRISES ON EITHER AN EQUITY OR CONTRACT
BASIS. BUT THE TASK OF DEVELOPMENT REQUIRES THE ADVANCEMENT
OF INDIGENOUS TECHNOLOGICAL CAPACITIES. MUCH OF THE TECH-
NOLOGY TRANSFERRED TO DEVELOPING COUNTRIES IS NOT APPROPRIATE
TO LOCAL CONDITIONS. MUCH OF IT IS NOT EFFICETIVELY MANAGED.
AN INTERNATIONAL CODE OF CONDUCT TO GOVERN TECHNOLOGY
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TRANSFER WOULD HELP DIRECT THIS FORM OF ASSISTANCE TOWARD
SOUND DEVELOPMENT GOALS. AN ACCEPTED SET OF GROUND RULES
WOULD PROTECT THE INTERESTS OF THE RECIPIENTS AND MITIGATE
THE COMPETITIVE PRESSURES OF THE COUNTRIES WHICH ARE
TRANSFERING THE TECHNOLOGY, BUT THE PROBLEM OF TECHNOLOGY
AND ITS TRANSFER IS MORE FUNDAMENTAL AND LONG-TERM THAN A
CODE COULD DEAL WITH. THE WORLD COMMUNITY'S OBJECTIVE SHOULD
BE THE GRADUAL BUILD-UP OF HUMAN CAPABILITIES AND TECHNOLOGY
INFRASTRUCTURE IN THE DEVELOPING ECONOMIES.
A MASSIVE EFFORT OF INTERNATIONAL SUPPORT IS REQUIRED,
IN MANY AREAS:
ZODIS
--IN ENERGY, I DISCUSSED THE INTENTION OF THE UNITED STATES
TO INCREASE SUPPORT FOR TRAINING AND TECHNICAL ASSISTANCE
TO HELP DEVELOPING COUNTRIES FIND AND EXPLOIT NEW SOURCES
OF FOSSIL FUEL AND OTHER FORMS OF ENERGY. I ALSO ELABORATED
ON OUR PROPOSAL FOR AN INTERNATIONAL ENERGY INSTITUTE FOR
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WORLDWIDE COOPERATION.
--IN AGRICULTURE, THE UNITED STATES HAS PROPOSED LEGIS-
LATION TO THE CONGRESS TO NABLE OUR UNIVERSITIES TO EXPAND
THEIR TECHNICAL ASSISTANCE AND RESEARCH IN FOOD PRODUCTION
S
AND NUTRITIONAL IMPROVEMENT. WE PROPOSED AN ORGANIZATION
TO COORDINATE ANn FINANCE ASSISTANCE TO THE POOREST COUNTRIES
TO IMPROVE THE PRODUCTIVITY AND COMPETITIVENESS OF THEIR
NON-FOOD AGRICULTURAL AND FORESTRY PRODUCTS AND TO DIVER-
SIFY THEIR ECONOMIES.
--TO ADDRESS THE BROAD PROMOTION OF INDUSTRIALIZATION
ITSELF, WE PROPOSED AN INTERNATIONAL INDUSTRIALIZATION
INSTITUTE TO SPONSOR AND CONDUCT RESEARCH WHICH WILL BENEFIT
DEVELOPING COUNTRIES. A SMALL STAFF OF PROFESSIONAL MEN
ZOPIN
AND WOMEN WOULD FOCUS ON AT LEAST THREE AREAS OF RESEARCH--
SELECTION OF INDUSTRY, BUILDING OF INFRASTRUCTURE, AND
INTERCHANGE BETWEEN THE INDUSTRIAL SECTORS OF THE DEVELOPED
AND DEVELOPING ECONOMIES. WE HAVE ALSO PROPOSED AN INTER-
NATIONAL CENTER FOR THE EXCHANGE OF TECHNOLOGICAL INFORMATION,
TO BE A CLEARING HOUSE FOR THE SHARING OF ONGOING RESEARCH
INFORMATION AND NEW FINDINGS RELEVANT TO DEVESOPMENT. THIS
WOULD LINK TOGETHER EXISTING NATIONAL AND INTERNATIONAL
SOURCES OF INFORMATION. WE ARE CURRENTLY SUPPORTING A
UNITED NATIONS GENERAL ASSEMBLY RESOLUTION WHICH CALLS FOR
THE SECRETARY-GENERAL TO PREPARE AN EXPERTS REPORT ON THE
DESIGN AND OPEATION OF THIS CENTER.
--THE LONG AND ARDUOUS PROCESS OF TRAINING LOCAL MANPOWER
AND SPECIALISTS MUST BE INTENSIFIED. THEREFORE, THE UNITED
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STATES PROPOSES THAT AN INTERNATIONAL INVENTORY OF TRAINED
MIDDLE MANAGEMENT PERSONNEL WITH EXPERIENCE IN TECHNOLOGY
S
DEVELOPMENT AND UTILIZATION BE MADE AVAILABLE TO THE
INTERNATIONAL INDUSTRAIALIZATION INSTITUTE FOR ASSIGNMENT
TO DEVELOPING COUNTRIES. THEI MISSION WOULD BE TO ENCOURAGE
THE EFFECTIVE DOMESTIC MANAGEMENT OF TECHNOLOGY AND TO TRAIN
LOCAL PEOPLE. WE BELIEVE THAT THE TRAINING OF HUMAN RESOURCES
IS A STRATEGIC PART OF THE INDUSTRIALIZATION PROCESS. WE
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WILL ELABORATE ON THIS PROPOSAL IN THE COURSE OF THE WORK
OF THE COMMISSIONS.
(NOTE: PROPOSAL IN LAST PARAGRAPH SHOULD BE CONSIDERED
AS A TENTATIVE ONE. S/P IS EXAMINING IT IN DETAIL NOW.)
THESE PROPOSALS -- AND ANY SIMILAR IDEAS THAT OTHERS
MAY OFFER -- ARE A PRACTICAL APPROACH TO THECHALLENGE OF
DEVELOPMENT. RHETORIC DOES NOT FEED PEOPLES, OR BUILD
INDUSTRIES. THE UNITED STATES TAKES THE PROBLEMS OF
ECONOMIC AND SOCIAL PROGRESS SERIOUSLY -- AND TO THIS END
WE HAVE PROPOSED CONCRETE AND EFFECTIVE STEPS,
S
COMMODITIES
THE NEXT AREAS FOR ATTENTION -- AFTER ENERGY, BALANCE OF
PAYMENTS PROBLEMS AND INVESTMENT ND TECHNOLOGY -- IS
COMMODITY TRADE. A HEALTHY GLOBAL ECONOMY REQUIRES THAT BOTH
PRODUCERS AND CONSUMERS FIND PROTECTION AGAINST THE CYCLE OF RAW
N
MATERIALS SURPLUS AND SHORTAGE WHICH CHOKES GROWTH AND
DISRPUTS PLANNING. THIS REQUIRES US TO CONSIDER MEASURES
TO ENSURE MORE RELIABLE SUPPLIES OF VITAL COMMODITIES ON
TERMS FAIR TO ALL.
THE PROBLEM IS MOST URGENT IN FOOD, MANKIND'S MOST
CRITICAL NEED. THE CYCLE OF FEAST ND FAMINE, WIDELY
FLUCTUATING PRICES OF BASIC FOODSTUFFS, AND BREAKDOWNS IN
THE SYTEM OF STORAGE AND TRANSPORTATION, PRODUCE RECURRING
MALNUTRITIONAND STARVATION' THIS CYCLE OF HARDSHIP SHOWS
FEW SIGNS OF ABATING. THE LONG-RUN GROWTH IN DEMAND FOR
FOOD THREATENS TO OUTPUN THE EXPANSION OF SUPPLY.
AS THE WORLD'S LARGEST PRODUCER AND EXPORTER, THE
S
UNITED STATES IS MINAFUL OF ITS SPECIAL RESPONSIBILITY
FOR THE INTERNATIONALMANAGEMENT OF OOD. ACCORDINGLY,
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WE HAVE BEEN PURSUING THE FOLLOWING POLICIES:
FIRST, AT HOME WE HAVE BEEN COMMITTED TO POLICIES OF
MAXIMUM FOOD PRODUCTION AND HAVE REMOVED ALL PRODUCTION
RESTRAINTS.
SECONDLY, INTERNATIONALLY WE HAVE PROPOSED A SYSTEM OF
GRAIN RESERVES TO HELP MODERATE FLUCTUATIONS INWORLD PRICES
AND SUPPLIES. WE FIRST PROPOSED THIS SYSTEM AT THE WORLD
FOOD CONFERENCE IN ROME IN NOVEMBER, 1974, WHICH WAS
CONVENED AT OUR INITIATIVE. WE THEN MADE SPECIFIC PROPOSALS
AND BEGAN NEGOTIATIONS. WE BELIEVE THAT:
--TO MEET VIRTUALLY ALL POTENTIAL SHORTFALLS IN FOOD
ZODIS
GRAINS PRODUCTION, TOTAL WORLD RESERVES MUST REACH AT LEAST
30 MILLION TONS OF WHEAT AND RICE. WE SHOULD CONSIDER WHETHER
A SIMILAR RESERVE IS NEEDED IN FOOD GRAINS.
""RESPONSIBILITY FOR HOLDING RESERVES SHOULD BE ALLOCATED
FAIRLY, TAKING INTO ACCOUNT WEALTH AND VOLUME OF PRODUCTION
AND TRADE. THE UNITED STATES IS PREPARED TO HOLD A MAJOR
SHARE.
--ACQUISITION AND RELEASE OF RESERVES SHOULD BE GOVERNED
BY QUANTITIATIVE STANDARDS SUCH AS ANTICIPATED SURPLUSES AND
SHORTFALLS IN PRODUCTION'
-- ACCESS TO RESERVES WHEN NEEDED WOULD BE ASSURED TO FULL
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PARTICIPANTS IN THE SYSTEM. AMONG MAJOR PRODUCERS, FULL
PARTICIPATION SHOULD REQUIRE COMPLETE EXCHANGE OF INFORMATION
AND FORECASTS.
--SPECIAL ASSISTANCE SHOULD BE EXTENDED TO DEVELOPING
COUNTRIES THAT PARTICIPATE so THAT THEY CAN MEET THEIR
OBLIGATION TO HOLD A PORTION OF GLOBAL RESERVES.
WE BELIEVE THAT THE GRAIN RESERVES PROPOSAL CAN BE A
MODEL FOR COOPERATION ON OTHER COMMODITY PROBLEMS. IT
MAKES SPECIAL PROVISION FOR THE CONCERNS OF DEVELOPING
COUNTRIES. ITS RELIANCE ON STOCKS MINIMIZES THE DISTORTION
OF TRADE, AND INDEED ENHANCES THE EFFICIENCY OF THE MARKET.
WE NOW AWAIT THE CONTRIBUTION OF OTHERS TO HELP IMPLEMENT
THIS PROPOSAL.
THIRDLY, WE ARE GREATLY EXPANDING OUR BILATERAL PROGRAMS
OF ASSISTANCE TO AGRICULTURAL PRODUCTION IN DEVELOPING
COUNTRIES. AT THE UN SPECIAL SESSION, THE UNITED STATES
RECOMMENDED THAT DEVELOPED COUNTRIES STRENGTHEN THEIR LINKS
ZODIU
WITH INTERNATIONAL RESEARCH CENTERS AND WITH NATIONAL
AGRICULTURAL RESEARCH CENTERS IN DEVELOPING COUNTRIES. THE
LEGISLATION PENDING IN OUR CONGRESS TO BOLSTER OUR SUPPORT
FOR INTERNATIONAL AND NATIONAL RESEARCH CENTERS WOULD ENSURE
A LONGER-TERM COMMITMENT FOR U.S. ASSISTANCE. WE ALSO
PROPOSED THAT THE INDUSTRIAL COUNTRIES SUPPORT EXPANSION
OF THE WORK OF THE EVISTING INTERNATIONAL AGRICULTURAL
RESEARCH CENTERS. WE BELIEVETHAT THE CONSULTATIVE GROUP
ON INTERNATIONAL AGRICULTURAL RESEARCH SHOULD EXAMINE THIS
ISSUE IN DETAIL AND PRESENT ITS RECOMMENDATIONS FOR FURTHER
ACTION BY NEXT SUMMER
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FOURTHLY, WE ARE SUPPORTING THE OPEC PROPOSAL FOR THE
INTERNATIONAL FUND. FOR AGRICULTURAL DEVELOPMENT TO MAKE A
CONTRIBUTION OF $200 MILLION. WE BELIEVE THAT THIS FUND
WILL BE A VALUABLE COMPONENT OF A GLOBAL FOOD SYSTEM WHICH
ENABLES DEVELOPING COUNTREIS TO PRODUCE ENOUGH FOO TO FEED
THEMSELVES. WE HOPE THAT THE DIL-PRODUCING COUNTRIES WILL
MATCH THE CONTRIBUTION OF THE INDUSTRIALIZED COUNTRIES, AND
WE LOOK FORWARD TO AN EARLY PLEDGING CONFERENCE.
N
THE INTERNATIONAL EFFORTS ALREADY UNDERWAY ON FOOD SHOULD
SET AN EXAMPLE FOR COOPERATION ON OTHER COMMODITY PROBLEMS.
OTHER COMMODITIES ARE OF CRITICAL IMPORTANCE TO INDIVIDUAL
COUNTRIES, EITHER IN THEIR CAPACITY AS PRODUCERS OR CONSUMERS.
MANY DEVELOPING COUNTRIES DEPEND CRUCIALLY ON COMMODITY
EXPORT EARNINGS TO LIFT THEM ABOVE SUBSISTENCE LEVELS, TO
FINANCE THE BEGINNINGS OF INDUSTRIALIZATION, AND TO SUPPORT
BASIC SOCIAL PROGRAMS. BUT SOLUTIONS TO COMMODITY ISSUES
WILL AFFECT NOT ONLY THE DEVELOPING COUNTRIES, BUT ALSO
THE INDUSTRIAL COUNTRIES -- WHO IN FACT ARE THE LARGEST
EXPORTERS OF FOOD AND MOST MINERALS. BOTH DEVELOPED AND
DEVELOPING COUNTRIES ARE ALSO AFFECTED BY THE INSTABILITY
S
OF THE MARKET -- BY THE VULNERABILITY OF AGRICULTURAL
COMMODITIES TO THE VAGARIES OF WEATHER AND SHIFTS IN WORLD
DEMAND; BY THE SENSITIVITY OF MINERAL MARKETS TO FLUCUATIONS
IN THE BUSINESS CYCLE IN THE INDUSTRIAL COUNTRIES; AND BY
HIGHER PRICES OF CRITICAL ENERGY IMPORTS.
WE BELIEVE THAT AT THE SEVENTH SPECIAL SESSION A CONSENSUS
WAS ACHIEVED THAT COMMODITY ISSUES COULD AND SHOULD BE
N
APPROACHED COMPREHENSIVELY AND COOPERATIVELY. THE GLOBAL
ECONOMIC SYSTEM IN TURN DEPENDS ON STABILITY OF EARNINGS,
MARKETS, SUPPLY AND PRICE. THERE ARE RECIPROCAL INTERESTS
THAT MUST BE ADDRESSED: THERE IS A COMMON INTEREST IN
COOPERATIVE SOI UTIONS.
WE HAVE AN OPPORTUNITY NOW TO GATHER TOGETHER THE MANY
IDEAS WHICH HAVE BEEN VOTCED OVER THE LAST YEAR. IT IS TIME
TO OUTLINE A REALISTIC AND CONSTRUCTIVE PROGRAM OF ACTION.
THE UNITED STATES STRONGLY BELIEVES THAT THE KEYS TO A
SOLUTION ARE AS FOLLOWS:
--ESTABLISHING PRODUCE-CONSUMER FORUMS FOR DISCUSSIONS OF
ALL KEY COMMODITIES;
--REDUCING OBSTACLES TO PRODUCERS ACCESS TO MARKETS AND
TO CONSUMERS' ACCESS TO SUPPLIES:
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--MORE RELIANCE ON BUFFER STOCKS, WHERE FEASIBLE AND
NECESSARY, IN PREFERENCE TO RESTRICTIONS ON TRADE AND
POPULATION:
--EXPANSION OF WORLDWIDE PRODUCTION CAPACITY IN KEY
COMMODITIES; AND
--IMPROVING THE PRODUCTIVITY AND MARKETABILITY OF
AGRICULTURAL RAW MATERIALS.
WE NOW STAND READY TO ESTABLISH PRODUCER-CONSUMER FORUMS
N
TO DISCUSS COPPER, BAUXITE, AND OTHER COMMODITIES WHERE
THEY DO NOT EXIST. WE PLAN TO ADDRESS THE QUESION OF SUPPLY
AND MARKET ACCESS IN THE MULTILATERAL TRADE NEGOTIATIONS IN
THE NEXT SEVERAL MONTHS. WE HAVE PROPOSED THAT THE IFC
AND THE IBRD MAKE AVAILABLE INCREASED FINANCING FOR MINERAL
DEVELOPMENT, AND WE LOOK FORWARD TO PROGRESS IN THIS AREA IN
THE NEAR FUTURE; WE PLAN TO SUPPORT THE U. N. REVOLVING FUND
FOR NATIONAL RESOURCES EXPLORATION. FINALLY, WE HAVE
S
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PROPOSED ESTABLISHMENT OF AN ORGANIZATION TO FINANCE AND
COORDINATE RESEARCH ON NON-FOOD TROPICAL PRODUCTS TO IMPROVE
THEIR PRODUCTIVITY AND COMPETITIVENESS.
WE LOOK FORWARD TO ADDITIONAL DISCUSSION OF THESE MEASURES
IN THE RAW MATERIALS COMMISSION OF THIS CONFERENCE.
GLOBAL PROVERTY
IN OUR DELIBERATIONS HERE, WE MUST ADDRESS THE PLIGHT OF
THE ONE-QUARTER OF MANKIND WHOSE LIVES ARE OVERWHELMED BY
S
PROVERTY AND HUNGER, AND WHOSE SPIRITS ARE NUMBED BY
INSECURITY AND DESPAIR. THIS GROUP HAS SUFFERED IMMEASURABLY
FROM THE HIGHER PRICES OF FOOD AND FUEL. THE EXPORT
REVENUES OF THE POOREST COUNTRIES HAVE BEEN MOST ADVERSELY
AFFECTED BY THE RECESSION, WHICH SHRANK THEIR EXPORTS AS
WELL AS THE WILL AND ABILITY OF DEVELOPED COUNTRIES TO
PROVIDE MORE OFFICIAL DEVELOPMENT ASSISTANCE.
N
IT IS ESTIMATED THAT IN THIS GROUP LESS THAN ONE PERSON
IN FIVE IS LITERATE; ONE CHILD IN TEN DIES, AND IN SOME
AREAS CLOSER TO ONE OUT OF TWO; LIFE EXPECTANCY IS LESS THAN
FIFTY YEARS; AND CRUDE BIRTH RATES CONTINUE TO BE AMONG
THE HIGHEST IN THE WORLD. IN THESE COUNTRIES, PUBLIC
EXPENDITURES FOR EDUCATION AND HEALTH CARE ARE LOW AND PER
CAPITA INCOME HAS BEEN DECLINING FOR THE LAST FOUR YEARS.
AND SO TODAY, ALONGSIDE THE THIRD WORLD WITH ITS INCREASING
POWER AND ASSERTIVENESS, THERE HAS COME INTO BEING A FOURTH
WORLD, WHERE HUMAN BEINGS BARELY EXIST, IN HARD-CORE POVERTY
THEIR PREOCCUPATION IS SIMPLY TO SURVIVE.
S
IN ONE INTERNATIONAL CONFERENCE AFTER ANOTHER, WE ALL
HAVE POINTED TO THE FOURTH WORLD WITH SINCERE INTENTIONS
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OF GIVING IMMEDIATE HELP, PROVIDING LONG-TERM ASSISTANCE, OR
DEVISING SPECIAL ARRANGEMENTS. WE HAVE AGREED THAT THIS IS
A MAJOR TEST OF A JUST INTERNATIONAL ORDER. BUT IT IS TIME
FOR ALL OF US HERE TO ACT ON OUR WORDS.
THREE AREAS NEED IMMEDIATE ACTION:
FIRST, MANY OF THE POOREST CANNOT FINANCE BALANCE OF
PAYMENTS DEFICITS BECAUSE OF THE DIFFICULTY OF GAINING
ACCESS TO CAPITAL MARKETS OR BECAUSE OF HIGH INTEREST
N
RATES ON WHAT LITTLE FINANCE THEY CAN OBTAIN. THE TRUST
FUND WHICH THE UNITED STATES PROPOSED IN THE IMF TO PROVIDE
UP TO $2 BILLION FOR EMERGENCY RELIEF IS OF SPECIAL BENEFIT
TO THEM. LET us TAKE UP THIS ISSUE AND REACH A CONSENSUS
TO CREATE THIS TRUST FUND AT NEXT MONTH'S IMF MEETING IN
JAMAICA.
THE SECOND AREA FOR IMMEDIATE ACTION IS FOOD. NO
OBLIGATION IS MORE BASIC THAN OUR ENSURING THAT THE POOREST
HAVE ENOUGH TO EAT. THE UNITED STATES HAS PLEDGED TO PROVIDE
SIX MILLION TONS OF FOOD AID -- WHICH IS 60 PERCENT OF THE
TEN-MILLION-TON GLOBAL TARGET SET BY THE WORLD FOOD CONFERENCE,
AND A 20 PERCENT INCREASE OVER LAST YEAR'S U.S. CONTRIBUTION.
S
OTHERS MUST DONATE THEIR FAIR SHARE. IN ROME, SOME PROGRESS
HAS NOW BEEN MADE TOWARDS REALIZATION OF THE INTERNATIONAL
FUND FOR AGRICULTURAL DEVELOPMENT; NOW WE NEED AN EARLY
PLEDGING CONFERENCE TO REACH OUR AGREED $1 BILLION GOAL.
THIRD, WE MUST FOCUS ON THE INTERNATIONAL FINANCIAL
INSTITUTIONS. AT THE SEVENTH SPECIAL SESSION, MY GOVERNMENT
PLEDGED TO SUPPORT THE FIFTH IDA REPLENISHMENT AND THE
N
REGIONAL DEVELOPMENT BANKS. WE CONTINUE TO BELIEVE THAT
THESE INSTITUTIONS PLAY A BASIC ROLE; WE HOPE THAT TRADITIONAL
AND NEW DONORS WILL ACTIVELY SUPPORT THEM WITH FINANCIAL
CONTRIBUTIONS.
LET US URGENTLY REDEDICATE OURSELVES TO ACTION ON BEHALF
OF THE POOREST AMONG US. SUCH ACTION IS THE RESPONSIBILITY
D
OF THE ENTIRE WORLD COMMUNITY -- NOT JUST THE INDUSTRIAL
COUNTRIES, BUT ALSO THE MORE AFFLUENT IN THE DEVELOPING
WORLD, WHILE NO ONE COMMISSION WILL BE DEALING WITH THE
PROBLEMS OF THE FOURTH WORLD, EACH COMMISSION HAS A RESPON-
SIBILITY TO RE CONSCIOUS OF THE NEED FOR SPECIAL CONSIDERATION
FOR THE POOREST.
S
CONCLUSION
LADIES AND GENTLEMEN:
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THE NATIONS AND ECONOMIES OF THE WORLD ARE MANY; OUR
DIFFERENCES ARE GREAT. BUT OUR REASONS FOR PULLING
S
TOGETHER ARE FAR GREATER. THEREFORE OUR DIALOGUE HERE MUST
BE CANDID, BUT WITH A POSITIVE SPIRIT AND COOPERATIVE
ATTITUDE. THE PROSPERITY, THE PROGRESS AND INDEED THE PEACE
OF THE WORLD MAY DEPEND UPON WHETHER WE SUCCEED IN FINDING
REALISTIC ANSWERS TO THE KINDS OF PROBLEMS BEFORE US AT
THIS CONFERENCE.
THE ISSUES WE FACE ARE TECHNICAL, BUT THEIR IMPLICATIONS
N
ARE MORE PROFOUND. INDEED, THEY GO TO THE HEART OF THE FUTURE
OF MANKIND. ONLY RARELY IN HISTORY DOES MANKIND CONSCIOUSLY
SWING OUT FROM FAMILIAR, MARKED-OUT PATHS TO STRIKE OFF IN
A NEW DIRECTION. ONLY RARELY DOES HUMANITY COMPREHEND AS
CLEARLY AS TODAY THAT CHANGE IS IMMINENT AND THAT THE
DIRECTION TO BE TAKEN IS SUBJECT TO HUMAN DECISION. THE
D
NATIONS OF THE WORLD ARE FACING SUCH AN OPPORTUNITY TODAY.
WE HAVE THE POSSIBILITY OF FORGING INTERNATIONAL
RELATIONSHIPS THAT WILL GOVERN WORLD AFFAIRS FOR THE NEXT
DECADES. WE CAN BRING TOGETHER DEVELOPED AND DEVELOPING,
PRODUCER AND CONSUMER, IN COMMON ENDEAVORS -- OR, WE CAN
GO OUR SEPARATE WAYS, ALL PAYING THE PRICE FOR OUR LACK OF
S
VISION. MUTUAL INTEREST SHOULD BRING US TOGETHER ONLY
BLINDNESS CAN KEEP us APART.
THE AMERICAN PEOPLE HAVE ALWAYS BELIEVED IN A WORLD
OF CONCILIATION RATHER THAN A WORLD RULED BY INTIMIDATION,
PRESSURE OR FORCE. MY COUNTRY, IN SPITE OF ITS OWN
STRENGTHS AND ADVANTAGES, HAS CHOSEN THE PATH OF COOPERATION
N
AND WE WILL STAY ON THAT PATH IF OTHERS WILL TRAVEL IT WITH
US. FOR WE RECOGNIZE THAT ALL OF us HERE HAVE A STAKE IN EACH
OTHER'S SUCCESS.
O
NECESSITY HAS BROUGHT US TO THIS POINT, BUT A HIGHER IDEAL
SUMMONS US TO CHOOSE WHERE WE WILL GO FROM HERE. WE HAVE
NO EXCUSE FOR FAILURE, FOR A BETTER FUTURE FOR ALL IS
D
WITHIN OUR REACH.
I AM CONFIDENT OF OUR COOPERATION AND OF OUR SUCCESS.
THE RESULT WILL BE A FAIR AND PROSPEROUS WORLD ECONOMY OF
BENEFIT TO ALL NATIONS, AND A NEW SPIRIT OF HOPE, WIDENING
OPPORTUNITY AND JUSTICE FOR ALL PEOPLES.
THANK YOU.
S
HODGSON
FORD
a
CONF IDENTIAL
GERALD
LIBRARY
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