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Thursday, 25 October 1973
Page: 2776

Mr Lynch asked the Treasurer, upon notice: Does the Government support the desirability of allocating any general issue of International Monetary Fund special drawing rights initially to underdeveloped countries.

Mr Crean - The answer to the honourable member's question is as follows:

Various proposals of this kind have been discussed in international forums over a number of years.

Recently the developing countries agreed to give their joint support to a particular scheme involving a change in method of distributing newlycreated special drawing rights (SDR) among participating countries so as to increase the share going to developing countries. This proposal has had a mixed reception among developed countries: a few have strongly opposed it, a few have leant it their support, while others have indicated a willingness to consider it fully when the major issues of monetary reform have been settled.

The Government agrees strongly with the objective of increasing the total flow of development assistance from developed to developing countries. At this stage it is difficult to judge whether increasing the share of SDR going to developing countries would be a desirable way of attempting to meet that objective. Some authorities have questioned whether using the SDR as a major channel for development assistance would be compatible with the SDR becoming a principal reserve asset in a reformed international monetary system. It is important to Australia that this status should not be in doubt.

Discussions on these matters are continuing in the Committee of the Board of Governors of the International Monetary Fund on Reform of the International Monetary System. The Government is reserving its position until these discussions are further advanced and the issues clarified.

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