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COMMONWEALTH PARLIAMENTARY LIBRARY

FOR PRESS No. 1005

STATEMENT BY THE TREASURER THE RIGHT HONORABLE .

HAROLD HOLT. M.P. , ·

Asian Development Bank

The Treasurer, Mr. Harold Holt, said today that

Australia supported the proposal to establish an Asian Development

Bank to promote economic development in the E.C.A.F.E. region.

Australia would be represented at a meeting of officials of

interested governments which is to be held in Bangkok from 21st

October to 1st November to make plans for the establishment of

the Bank. The Australian delegation, which will consist of

representatives of the Treasury, the Department of External .

Affairs and the Reserve Bank of Australia, will be led by Mr.

F.C. Pryor, Acting First Assistant Secretary, Department of the

Treasury.

The main task of the officials’ meeting will be to

work out a Charter for the Bank which will then be considered

at a Ministerial meeting later this year in Manila.. Assuming

agreement is reached, it is envisaged that the Charter would

then be open for formal ratification by prospective member

countries and that the Bank might be in a position to commence

operations by about the middle of 1966.

Mr. Holt said that the meeting to be held shortly in

Bangkok at the official level would have before it a report

(which includes a draft Charter) which had been prepared by a

Consultative Committee drawn from E.C.A.F.E. countries. Members

of this Consultative Committee had recently visited all

interested countries (including Australia) and engaged in

exploratory discussions on the main problems involved in

establishing the Bank. It is suggested in this report that the

initial capital of the Bank should be 01,000 million of which

0600 million should be subscribed by countries in the E.C.A.F.E.

region (of which Australia is a member) and the remainder from

countries outside the region. The Committee suggest that half

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of the authorised capital should be paid up and that the

remainder should be callable only to meet the Bank1s obligations

in case of default. Of the paid-in portion, half would be payable

in gold or convertible currency and the remainder in local

currency.

Mr. Holt said the Commonwealth Government had decided

that an Australian subscription of #75 million towards a total

initial capital of #1,000 million would be appropriate. This

would involve cash payments over a period amounting to #37·5

million of which half (#18.75 million) would be payable in

foreign exchange; the other half would be payable in Australian

currency and would be available for the purchase of goods and

services from Australia for Bank-financed projects.

The Treasurer said that an Australian subscription of

this magnitude clearly involved a substantial addition to

Australia's aid effort which had been growing rapidly in recent,

years and which already compared well with the- efforts of other

donor countries. Nevertheless the government felt that an

Asian Development Bank could play a very important role in the

economic development of the area and that it merited substantial

Australian support.

It was too early to say whether the target figure of

#1,000 million for the Bank's capital·would be achieved. The

proposal was receiving strong support from other countries in the

E.C.A.F.E. region (including a subscription of #200 million by

Japan) and the United States was prepared to make #200 million

available towards the figure of #400 million envisaged for

capital subscriptions by countries outside the region. In

its report the Consultative Committee had stressed the

importance of securing substantial support for the Bank from

countries outside the region and it was to be hoped that this

support would be forthcoming.

The Treasurer added that a final decision regarding

Australian membership of the Bank could not be made until the

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whole proposal had been formulated In detail and submitted

to Governments for consideration. In the meantime, Australia

was very happy to associate itself with other countries in '

planning for this new institution.

Canberra, A.C.T. J \bth October, 1965