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OECD Ministerial Council meeting



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TREASURER

EMBARGO 4 p .m . SUNDAY 2 6 JUNE

NO.

OECD M IN ISTE R IA L COUNCIL MEETING

THE TREASURER, MR P H IL L IP LYNCH, SA ID THE OUTCOME OF THE OECD

M IN IS T E R IA L COUNCIL MEETING HAD REAFFIRMED THE MEDIUM TERM ECONOMIC

STRATEGY AGREED LAST YEAR AS ESSEN TIA L FOR ACHIEVEMENT OF NON­

INFLATIONARY GROWTH IN THE WESTERN ECONOMIES.

MR LYNCH WAS SPEAKING IN PA R IS AT THE CONCLUSION OF THE MEETING.

HE SA ID THE M IN IS T E R IA L D ISC U SSIO N S HAD CONFIRMED THE B A SIS OF THE

STRATEGY $ NAMELY THAT FURTHER PROGRESS IN WINDING DOWN INFLATION

WAS THE FUNDAMENTAL PR E-CO N D ITIO N FOR SUSTAINABLE ECONOMIC GROWTH.

I T HAD BEEN AGREED THAT AN OVERALL GROWTH RATE OF OECD GNP OF

AROUND 5 PER CENT IN 1 9 7 8 WOULD BE CONSISTENT WITH THE STRATEGY.

WHERE CONSISTENT WITH REDUCING T H E IR OWN IN FLA TIO N "STRONGER"

COUNTRIES (THOSE HAVING RELATIVELY LOWER RATES OF IN FL A T IO N ) WOULD

TAKE APPROPRIATE DOMESTIC OR EXTERNAL A CTIO N .

M IN IST E R S HAD AGREED THAT "WEAKER" COUNTRIES SHOULD PURSUE VIGOROUS

S T A B IL IS A T IO N P O L IC IE S SO AS TO MAINTAIN DEMAND AT A LEVEL COMPATIBLE

WITH REDUCING T H E IR RATES OF IN FL A T IO N .

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PARTICULAR ATTENTION HAD BEEN GIVEN TO THE PROBLEMS OF

INVESTMENT AND UNEMPLOYMENT.

M IN IS T E R S TOOK THE VIEW THAT THE PROBLEMS OF HIGH UNEMPLOYMENT

AND INADEQUATE LEVELS OF INVESTMENT WOULD NOT BE SOLVED ONLY BY

IN CREA SIN G DEMAND.

THERE WAS A NEED IN COUNTRIES WHERE REAL WAGES HAD RUN AHEAD OF

PRODUCTIVITY IN C R EA SE S, SUCH AS AUSTRALIA, FOR HIGHER RETURNS

ON INVESTMENT AND FOR RECOGNITION THAT THERE WAS REDUCED SCOPE

FOR INCREASES IN CONSUMPTION SPENDING.

T H IS WOULD REQUIRE A REDUCTION IN THE LEVEL OF REAL WAGES.

M IN IS T E R S HAD ALSO POINTED TO THE NEED, WHERE A PPRO PRIA TE, FOR

MEASURES TO A S S IS T WORKFORCES TO COPE WITH STRUCTURAL CHANGE AND FOR

S P E C IA L ATTENTION TO BE GIVEN TO THE PROBLEMS OF YOUTH UNEMPLOYMENT.

THE MEETING HAD DEALT GENERALLY WITH THE NEED FOR BETTER

INFORMATION AS TO THE ECONOMIC O BJECTIV ES OF MEMBER COUNTRIES

IN ORDER TO F A C IL IT A T E THE MONITORING OF PROGRESS UNDER THE

STRATEGY.

TO T H IS END I T HAD BEEN AGREED THAT COUNTRIES WOULD COMMUNICATE

T H E IR PRELIMINARY O B JE C TIV ES FOR THE GROWTH OF OUTPUT AND

DOMESTIC DEMAND FOR 1 9 7 8 TO THE ORGANISATION AND WOULD ALSO PROVIDE

D E T A IL S OF TH EIR S T A B IL IS A T IO N P O L IC IE S .

THE MEETING HAD ALSO CONSIDERED THE MCCRACKEN REPORT.

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IN THAT CONTEXT COUNTRIES WOULD UNDERTAKE FURTHER STUDY OF THE

VALUE OF PUBLICLY ANNOUNCED NORMS FOR THE GROWTH OF MONETARY

AGGREGATES.

CONSIDERATION WOULD ALSO BE GIVEN BY MEMBER COUNTRIES TO THE

FORMULATION OF F IS C A L POLICY GEARED TO GUID ELIN ES FOR PUBLIC

EXPENDITURE DESIGNED TO AVOID STIMULUS TO IN FL A T IO N .

M IN ISTERS HAD ALSO GIVEN CONSIDERATION TO IS S U E S RELATING TO :

. DEVELOPMENT CO-OPERATION

. ENERGY

. COMMODITIES

. TRADE, AND

. INTERNATIONAL INVESTMENT AND MULTINATIONAL EN TERPRISES

CANBERRA ACT 2 6 JUNE 1 9 7 7

OECD M IN IS T E R IA L COUNCIL MEETING t COMMUNIQUE

1 . THE COUNCIL OF THE ORGANISATION FOR ECONOMIC CO-OPERATION

AND DEVELOPMENT MET AT M IN ISTE R IA L LEVEL ON 23RD JU N E , UNDER THE

CHAIRMANSHIP OF THE HONOURABLE ANDREW PEACOCK, M . P . . , AUSTRALIAN

M IN ISTE R FOR FOREIGN A F F A IR S , AND ON 24TH JUNE WITH THE RIGHT

HONOURABLE P H IL L IP LYNCH, M . P . , AUSTRALIAN TREASURER, IN THE

C H A IR .

DEVELOPMENT CO-OPERATION

2 . M IN IS T E R S REVIEWED THE RESULTS OF THE CONFERENCE ON

INTERNATIONAL ECONOMIC CO-OPERATION AND DISCUSSED LONGER-TERM

ASPECTS OF INTERNATIONAL DEVELOPMENT CO -OPERA TIO N . M IN ISTER S THEN

ADOPTED THE DECLARATION ON RELATIONS WITH DEVELOPING COUNTRIES

ANNEXED TO T H IS COMMUNIQUE. THEY REAFFIRMED THE IMPORTANCE

OF CLOSE COLLABORATION AND STRENGTHENED CO-ORDINATION WITHIN

THE OECD TO A S S IS T MEMBER GOVERNMENTS TO PREPARE FOR S P E C IF IC

D ISC U SSIO N S WITH THE DEVELOPING COUNTRIES IN THE VARIOUS

INTERNATIONAL FORA IN WORKING TOWARD THE O BJECTIV ES SET FORTH IN

THE DECLARATION. .

ENERGY

3 . M IN IS T E R S RECOGNISED THAT AN IMBALANCE BEIWEEN WORLD ENERGY

SUPPLY AND DEMAND, WHICH COULD OCCUR AS EARLY AS THE 1 9 8 0 S , WOULD

HAVE SEVERE ECONOMIC, SOCIAL AND P O L IT IC A L REPERCUSSIONS IN

OECD COUNTRIES AND THROUGHOUT THE WORLD. THEY EXPRESSED TH EIR

DETERMINATION TO AVOID THAT SITU A TIO N BY STRONGER ACTION TO

CONSERVE ENERGY AND DEVELOP ALTERNATIVE SOURCES OF ENERGY AND BY

INCLUDING SOUND ENERGY P O L IC IE S IN T H E IR OVERALL ECONOMIC P O L IC Y .

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COMMODITIES

4 . M IN ISTE R S NOTED THE IMPORTANCE OF CONTINUING D ISC U SSIO N S ON

COMMODITIES AND ENDORSED THE AGREEMENT REACHED IN THE CIEC TO

ESTABLISH A COMMON FUND WITH THE S P E C IF IC PURPOSES, OBJECTIVES

AND OTHER CONSTITUENT ELEMENTS TO BE FURTHER NEGOTIATED IN

UNCTAD, AND THE WILLINGNESS DECLARED AT THE CONFERENCE TO MAKE

ALL EFFORTS FOR THE SUCCESS OF THE NEGOTIATIONS BEING

UNDERTAKEN IN UNCTAD ON COMMODITIES. THEY IN V ITE D THE ORGANISATION

TO CONTINUE IT S WORK IN THE F IE L D OF COMMODITIES IN ORDER TO

A S S IS T MEMBER COUNTRIES IN THESE EFFO RTS, AND TO EXAMINE OTHER

RELATED COMMODITY IS S U E S . ■

TRADE

5 . M IN ISTE R S AGREED THAT, WHILE IN SEVERAL RESPECTS THE ECONOMIC

SITUATION WAS D IFFER EN T FROM THAT WHICH PREVAILED AT THE TIM E .

OF THE ADOPTION OF THE TRADE DECLARATION IN 1 9 7 4 , I T WAS S T IL L

CHARACTERISED BY EXCEPTIONAL D IF F IC U L T IE S AND DIVERGENCIES

IN MEMBER CO U N TRIES' S IT U A T IO N S . THEY NOTED WITH CONCERN THAT

PER SISTEN T HIGH LEVELS OF UNEMPLOYMENT AND D IF F IC U L T IE S IN

CERTAIN SECTORS HAVE INCREASED PRO TECTIO N IST PRESSURES.

M IN ISTERS EMPHASIZED THAT RECOURSE TO PRO TECTIO N IST P O L IC IE S

WOULD FOSTER UNEMPLOYMENT, INCREASE IN FLA TIO N AND REDUCE ECONOMIC

WELFARE. THEY AGREED THAT THE PRESENT ECONOMIC SITUATION

TOGETHER WITH THE INCREASING INTERDEPENDENCE OF OECD

ECONOMIES REINFORCED THE NEED FOR A RENEWED P O L IT IC A L COMMITMENT

TO AVOID R E S T R IC T IV E UNILATERAL TRADE AND CURRENT ACCOUNT MEASURES

AND THE A R T IF IC IA L STIMULATION OF EXPORTS: MEASURES OF T H IS

ώ

KIND TENDED TO CARRY THE R IS K OF PROLIFERATION WITH S E L F -

DEFEATING IM P L IC A T IO N S . THEY ALSO AGREED THAT SUCH A COMMITMENT

AND RELATED D IS C IP L IN E S IN THE F IE L D OF GENERAL ECONOMIC POLICY

WERE AN ESSEN TIA L ELEMENT OF THE STRATEGY FOR SUSTAINED NON-INFLAT­

IONARY ECONOMIC GROWTH IN THE OECD AREA. INDEED SUCH GROWTH SHOULD

IT S E L F F A C IL IT A T E THE AVOIDANCE OF R E S T R IC T IO N .

6 . MEMBER GOVERNMENTS THEREFORE DECIDED TO RENEW, FOR A

FURTHER YEAR, T H E IR TRADE DECLARATION OF 30TH MAY, 1 9 7 4 . THEY

AGREED THAT FULL USE SHOULD BE MADE OF THE EX IST IN G P O S S IB IL IT IE S

FOR CONSULTATION IN ORDER TO FIN D AND IMPLEMENT MULTILATERALLY

ACCEPTABLE SOLUTIONS TO TRADE PROBLEMS, WHETHER INDUSTRIAL OR

AGRICULTURAL, IN A MANNER WHICH WOULD TAKE INTO ACCOUNT THE

IN TER ESTS OF ALL CONCERNED. IN THE CASE OF SECTORAL PROBLEMS EVERY

EFFORT SHOULD BE MADE TO ID E N T IFY SUCH PROBLEMS BEFORE THEY

ASSUMED C R IT IC A L PROPORTIONS AND TO PROCEED TO CONSULTATIONS IN

T H E IR REGARD, TAKING INTO CONSIDERATION, IN TER A L IA , STRUCTURAL

CHANGES IN THE WORLD ECONOMY.

7 . M IN ISTE R S WELCOMED THE PROGRESS ACHIEVED IN MULTILATERAL

CO-OPERATION CONCERNING EXPORT CREDITS AND UNDERLINED THE NEED

FOR FURTHER EFFORTS TO IMPROVE AND EXTEND THE CONSENSUS ON GUIDE­

L IN E S FOR THE EXTENSION OF O FFIC IA LLY SUPPORTED EXPORT C R E D IT S .

8 . M IN ISTE R S REAFFIRMED THAT I T WAS ESSENTAL TO MAINTAIN

AN OPEN AND MULTILATERAL TRADING SYSTEM AS A BASIC ELEMENT IN

THE OVERALL APPROACH TO THE ECONOMIC PROBLEMS WITH WHICH TH EIR

COUNTRIES WERE CONFRONTED AND STRESSED THE IMPORTANCE OF G IV IN G

IMPETUS TO THE MULTILATERAL TRADE NEGOTIATIONS WITH THE O BJECTIV E

OF MAKING SUBSTANTIVE PROGRESS IN KEY AREAS IN 19 7 7 » AND ACHIEVING

AGREEMENT OVER THE RANGE OF IS S U E S AS RAPIDLY AS P O S S IB L E .

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9 . M IN ISTER S WELCOMED THE WORK BEING DONE IN THE UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL ON CORRUPT PRACTICES IN INTERNATIONAL

COMMERCIAL TRANSACTIONS, AND EXPRESSED THE HOPE THAT I T WOULD

TAKE THE MEASURES NECESSARY WITH A VIEW TO REACHING AGREEMENT

AS EARLY AS P O S S IB L E ON APPROPRIATE MEANS, INCLUDING THE

NEGOTIATION OF AN INTERNATIONAL AGREEMENT, OF COMBATTING I L L I C I T

PAYMENTS.

INTERNATIONAL INVESTMENT AND MULTINATIONAL ENTERPRISES

1 0 . RECALLING THE DECLARATION AND THE D EC ISIO N S OF OECD MEMBER

GOVERNMENTS OF 2 1 S T JU N E , 1 9 7 6 , ON INTERNATIONAL INVESTMENT AND

MULTINATIONAL E N T E R P R IS E S , M IN ISTERS WELCOMED THE WORK OF THE

UNITED NATIONS COMMISSION ON TRANSNATIONAL CORPORATIONS ON A

CODE OF CONDUCT.

PROGRESS UNDER THE STRATEGY FOR SUSTAINED ECONOMIC EXPANSION

1 1 . PROGRESS UNDER STRATEGY FOR SUSTAINED ECONOMIC EXPANSION,

AIMING AT A PROGRESSIVE RETURN TO FULL EMPLOYMENT AND P R IC E

S T A B IL IT Y , WHICH THEY ADOPTED IN JU N E 1 9 7 6 . THE B A SIS PREM ISE

ON WHICH T H IS STRATEGY RESTS I S THAT THE STEADY ECONOMIC GROWTH

NEEDED TO RESTORE FULL EMPLOYMNET AND SA T ISFY R IS IN G ECONOMIC

AND SOCIAL A SPIR A TIO N S WILL NOT PROVE SUSTAINABLE UNLESS

MEMBER COUNTRIES MAKE FURTHER PROGRESS TOWARDS ERADICATING

IN FL A T IO N . M IN IST E R S EXAMINED THE PROGRESS MADE IN IMPLEMENTING

THE STRATEGY AND REVIEWED THE PROSPECTS FOR THE COMING YEAR.

WHILE RECOGNIZING THAT SERIOUS PROBLEMS P E R SIST E D THEY WELCOMED

THE FACT THAT SOME MEMBER GOVERNMENTS HAD COMMITTED THEMSELVES

TO ECONOMIC GROWTH TARGETS DURING 1 9 7 7 AND SOME OTHERS TO

S T A B ILIZA TIO N P O L IC IE S WHICH WERE INTENDED TO PROVIDE A B A SIS FOR

SUSTAINED NON-INFLATIONARY GROWTH WORLD-WIDE,

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1 2 . M IN IST E R S AGREED THAT THE ACHIEVEMENT OF THE OBJECTIVES

OF THE STRATEGY WOULD BE PROMOTED BY A SOMEWHAT FASTER RATE OF

EXPANSION IN THE OECD AREA AS A WHOLE IN 1 9 7 8 THAN SEEMS LIKELY TO

BE ACHIEVED IN 1 9 7 7 , ALTHOUGH T H IS DOES NOT APPLY TO SOME

CO UN TRIES. AN OVERALL GROWTH RATE OF OECD GNP OF AROUND 5 PERCENT

IN 1 9 7 8 WOULD AT T H IS POINT SEEM DESIRABLE AND CONSISTENT WITH

THE STRATEGY. THEY AGREED THAT, WHERE NECESSARY AND A PPRO PRIA TE,

ACTION SHOULD BE TAKEN TO ACHIEVE T H I S . T H IS SOMEWHAT FASTER

RATE OF EXPANSION SHOULDt .

- ENABLE REAL PROGRESS TO BE MADE IN REDUCING UNEMPLOYMENT

NEXT YEAR|

- HELP TO STIMULATE THE PRODUCTIVE INVESTMENT NEEDED TO

PROVIDE JO B S FOR THE UNEMPLOYED; AND

- BE COMPATIBLE WITH A FURTHER REDUCTION IN THE RATE OF

IN F L A T IO N ,

1 3 . FURTHER PROGRESS AGAINST IN FLATION WILL NOT COME ABOUT

OF IT S OWN ACCORD. DETERMINED ACTION WILL BE REQUIRED TO SLOW

DOWN THE PRICE/W AGE S P IR A L . SOME COUNTRIES WILL NEED TO PURSUE-

AND SOME TO REINFORCE - VIGOROUS S T A B IL IZ A T IO N P O L IC IE S . TO

PROMOTE BETTER PAYMENTS EQ U ILIB R IU M , MEMBER COUNTRIES IN A WEAK

EXTERNAL P O S IT IO N WILL HOLD THE GROWTH OF DOMESTIC DEMAND TO A

RATE COMPATIBLE WITH REDUCING IN F L A T IO N , AND ALSO FOLLOW

P O L IC IE S TO IMPROCE TH EIR COM PETITIVE P O S IT IO N , SO AS TO ATTAIN

A SUSTAINABLE CURRENT ACCOUNT P O S IT IO N . MEMBER COUNTRIES IN A

STRONG EXTERNAL P O S IT IO N WILL PROVIDE FOR A SUSTAINED EXPANSION OF

DOMESTIC DEMAND COMPATIBLE WITH FURTHER REDUCTION OF IN FL A T IO N i

THEY ARE READY TO SE E A WEAKENING IN TH EIR CURRENT ACCOUNT P O S IT IO N

AND AN A PPR EC IA TIO N OF TH EIR CURRENCIES IN RESPONSE TO UNDERLYING

MARKET FORCES

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1 4 . S P E C IF IC O BJECTIV ES AND P O L IC IE S FOR EXPANSION AND

STA B ILIZA TIO N WILL VARY AS BETWEEN MEMBER COUNTRIES. BUT, TAKEN

TOGETHER, THEY MUST PROVIDE THE B A SIS FOR SUSTAINED NON­

INFLATIONARY GROWTH IN THE OECD AREA AND THE WORLD ECONOMY AS A

WHOLE. M IN ISTE R S AGREED ON THE NEED TO STRENGTHEN PROCEDURES FOR

MONITORING PROGRESS UNDER THE STRATEGY. TO T H IS END, THEY

DECIDED THAT MEMBER COUNTRIES WOULD COMMUNICATE TH EIR PRELIMINARY

OBJECTIVES FOR THE GROWTH OF OUTPUT AND DOMESTIC DEMAND AND TH EIR

STA B ILIZA TIO N P O L IC IE S FOR 1 9 7 8 TO THE ORGANISATION SO THAT TH EIR

MUTUAL CONSISTENCY AND GLOBAL IM PLICATION S CAN BE EXAMINED, AND

CAN THEN PROVIDE THE B A SIS FOR MONITORING PROGRESS DURING

THE COURSE OF NEXT YEAR.

1 5 . M IN ISTE R S RECOGNISED THAT SUSTAINED INCREASE IN DEMAND,

WHILE NECESSARY, WILL NOT ON IT S OWN SOLVE THE PROBLEMS OF

UNEMPLOYMENT AND LAGGING INVESTMENT, WHICH ARE DUE IN PART TO

STRUCTURAL CAUSES AND THE LEGACY OF EVENTS OF RECENT YEARS.

- LAGGING INVESTMENT NOW CAN LEAD TO UNEMPLOYMENT LATER.

IN COUNTRIES WHERE REAL WAGES HAVE RUN AHEAD OF PRODUCTIVITY

INCREASES IN RECENT YEARS THERE I S A NEED TO INCREASE THE

RETURN ON INVESTMENT. IN SOME COUNTRIES THERE MAY BE NEED

FOR A GREATER CONSENSUS BETWEEN GOVERNMENT, LABOUR AND

MANAGEMENT ON THE REDUCED SCOPE FOR INCREASES IN PUBLIC

AND PR IV A TE CONSUMPTION.

- IN PREV A ILIN G CIRCUMSTANCES FURTHER EFFORTS WHERE

A PPROPRIATE SHOULD BE MADE TO SUPPLEMENT OVERALL DEMAND

MANAGEMENT P O L IC IE S BY S P E C IF IC MEASURES DESIGNED

TO INCREASE EMPLOYMENT

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INCLUDING P O L IC IE S WHICH HELP ADAPT THE LABOUR FORCE

TO THE REQUIREMENTS OF RA PID STRUCTURAL AND TECHNOLOGICAL

CHANGE.

- IN THE EFFORTS TO REDUCE UNEMPLOYMENT, PARTICULAR ATTENTION

SHOULD BE PA ID TO THE UNEMPLOYMENT OF YOUNG WORKERS. SPEC IA L

MEASURES HAVE BEEN TAKEN IN MANY COUNTRIES AND MORE MAY BE

NEEDED. M IN IST E R S INSTRUCTED THE ORGANISATION TO STRENGTHEN

IT S EXCHANGE OF EXPERIENCE AND TO ORGANISE URGENTLY A H IG H - .

LEVEL CONFERENCE FOR T H IS PURPOSE.

1 6 . M IN ISTE R S REVIEWED THE INTERNATIONAL PAYMENTS S IT U A T IO N .

THEY WELCOMED THE PROGRESS BEING MADE TOWARDS A MORE APPROPRIATE

PAYMENTS P O S IT IO N BY SOME OF THE LARGER MEMBER COUNTRIES. WHILE

SOME OF THE SMALLER MEMBER COUNTRIES ARE ALSO MAKING PROGRESS

IN THE RIGHT D IR E C T IO N , MANY OF THEM ARE S T IL L RUNNING UNSUSTAINABLY

LARGE CURRENT ACCOUNT D E F IC IT S . M IN ISTER S UNDERLINED THE NEED FOR

CONTINUED EFFORTS TO ARRIVE AT A MORE SUSTAINABLE PATTERN OF

CURRENT ACCOUNT P O S IT IO N S IN THE OECD AREA. THEY AGREED ON THE

NEED TO ENSURE THAT ADEQUATE O F F IC IA L FINANCING F A C IL IT IE S ARE

AVAILABLE TO BACK UP APPROPRIATE ST A B IL IS A T IO N PROGRAMMES. IN

T H IS CONNECTION THEY HEARD A STATEMENT BY THE MANAGING DIRECTOR

OF THE INTERNATIONAL MONETARY FUND ON THE PROGRESS MADE IN

NEGOTIATING ADDITIONAL RESOURCES TO FINANCE BALANCE-OF-PAYMENTS

THROUGH THE IM F . MANY M IN ISTE R S STRESSED THE IMPORTANCE THEY

ATTACHED TO IMPLEMENTATION OF THE OECD FIN A N CIA L SUPPORT FUND IN

ADDITION TO THE IM F F A C IL IT Y

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1 7 . M IN ISTER S NOTED THAT PRESENT CONJUNCTURAL D IF F IC U L T IE S

ARE EXACERBATING LONGER-RUN STRUCTURAL AND DEVELOPMENT PROBLEMS,

AS WELL AS THE EMPLOYMENT AND BALANCE OF PAYMENTS D IF F IC U L T IE S ,

OF SOME MEMBER CO UN TRIES. M IN ISTERS THEREFORE AGREED THAT THE

COMPETENT BODIES OF THE ORGANISATION DEALING WITH THE VARIOUS

ASPECTS OF THESE PROBLEMS SHOULD, IN A P O S IT IV E AND CO-ORDINATED

WAY, TAKE INTO CONSIDERATION THE MEANS TO OVERCOME SUCH

D IF F IC U L T IE S .

1 8 . M IN ISTER S NOTED WITH IN TEREST THE RECOMMENDATIONS CONTAINED

IN THE REPORT TOWARDS FULL EMPLOYMENT AND P R IC E ST A B IL IT Y

PRODUCED BY A GROUP OF EXPERTS UNDER THE CHAIRMANSHIP OF PROFESSOR

McCRACKEN AND INSTRUCTED THE ORGANISATION TO EXAMINE BOTH THE

ANALYSIS AND RECOMMENDATIONS IN THE REPORT. THEY AGREED THAT,

TAKING ACCOUNT OF THE IMPORTANT DIFFERENCES BETWEEN CO UNTRIES,

THE ORGANISATION AND MEMBER GOVERNMENTS SHOULD STUDY IN PARTICULAR

THE RECOMMENDATION THAT, OVER THE MEDIUM TERM, A POLICY OF NOT

ACCOMMODATING HIGH RATES OF IN FLATION SHOULD BE BU ILT AROUND SOME

OR ALL OF THE FOLLOWING ELEMENTS t PUBLICLY-ANNOUNCED NORMS FOR

THE GROWTH OF THE MONETARY AGGREGATES; A F IS C A L POLICY GEARED

TO GUID ELIN ES FOR PUBLIC EXPENDITURE AND A BUDGET NORM DESIGNED

TO AVOID G IV IN G AN INFLATIONARY STIM ULUS; AND CONSULTATIVE

ARRANGEMENTS DESIGNED TO CLARIFY THE KIND OF P R IC E AND WAGE

BEHAVIOUR CONSISTENT WITH ACHIEVING AND MAINTAINING FULL EMPLOYMENT.

1 9 . M IN ISTE R S ALSO NOTED WITH IN TEREST THE REPORTS BY THE OECD

TRADE UNION ADVISORY COMMITTEE ON A STRATEGY FOR FULL EMPLOYMENT

AND INSTRUCTED THE ORGANISATION TO STUDY AND EVALUATE THE PROPOSALS

CONTAINED IN THEM, AS WELL AS IN THE PAPER BY THE OECD BU SIN ESS AND

INDUSTRY ADVISORY COMMITTEE ON NON-INFLATIONARY GROWTH.

OECD - M IN IS T E R IA L COUNCIL MEETING

DECLARATION ON RELATIONS WITH DEVELOPING COUNTRIES

1 . M IN IST E R S OF MEMBER GOVERNMENTS OF THE OECD MEETING IN

PA R IS ON 23RD JU N E , 1 9 7 7 , DISCUSSED RELATIONS WITH DEVELOPING

COUNTRIES AND THE LONGER-TERM ORIENTATION OF INTERNATIONAL

DEVELOPMENT CO -O PERA TIO N .

2 . M IN IST E R S AFFIRMED THAT THE C IEC HAD PLAYED A VALUABLE

ROLE IN BU ILD ING UP A CLIMATE OF DIALOGUE BETWEEN THE DEVELOPING

AND DEVELOPED CO U N TRIES. I T HAD PROVIDED THE OPPORTUNITY FOR A

THOROUGH GLOBAL EXAMINATION OF THE MAJOR IS S U E S INVOLVED AND

AGREEMENT WAS REACHED ON A NUMBER OF IMPORTANT P O IN T S , ALTHOUGH

I T HAD NOT BEEN P O S S IB L E TO REACH AGREEMENT ON SOME OTHER

IMPORTANT T O P IC S OF MUTUAL IN T E R E S T . ALL MEMBER GOVERNMENTS

OF THE OECD, INCLUDING THOSE WHO D ID NOT PA R T IC IP A T E IN THE

C IE C , JO IN E D TOGETHER IN WELCOMING THE AGREEMENTS THAT WERE

REACHED TH ERE. THEY ALSO WELCOMED THE INTENTION OF SOME OECD

MEMBER GOVERNMENTS, IN ADDITION TO THOSE WHO TOOK PART IN THE

CONFERENCE, TO ASSO CIA TE THEMSELVES WITH A SPE C IA L ACTION PROGRAMME

ANNOUNCED AT THAT CONFERENCE.

3 . LOOKING AHEAD, THEY AGREED THAT FURTHER EFFORTS WERE

NEEDED ON THE PART OF BOTH DEVELOPED AND DEVELOPING COUNTRIES

TO BUILD A MORE EQUITABLE AND STABLE INTERNATIONAL ECONOMIC

SYSTEM, ONE WHICH WOULD CREATE A BETTER L I F E FOR ALL PEO PLE.

THESE EFFORTS W ILL BE SUPPORTED BY A RETURN TO FULL HEALTH OF

THE INTERNATIONAL ECONOMY WHICH I S THE CONCERN OF DEVELOPED AND

DEVELOPING COUNTRIES A L IK E . RECALLING T H E IR DECLARATION OF

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28TH MAY, 1 9 7 5 , M IN ISTE R S EXPRESSED T H E IR READINESS TO

PURSUE ACTIVELY THE ON-GOING DIALOGUE WITH DEVELOPING

COUNTRIES IN THE UNITED NATIONS SYSTEM AND IN OTHER APPROPRIATE

FORA AND TO CO-OPERATE IN SOLVING ECONOMIC AND SOCIAL PROBLEMS

OF COMMON CONCERN, THEREBY MAKING I T P O S S IB L E FOR THE DEVELOPING

COUNTRIES TO P A R T IC IP A T E INCREASINGLY IN THE BEN EFITS OF AN

IMPROVED AND EXPANDING WORLD ECONOMY. IN T H IS CONNECTION .

THEY STRESSED T H E IR W ILLINGNESS TO ENCOURAGE EFFE C T IV E INTERNATIONAL

CO-OPERATION AND DIALOGUE ON ENERGY.

4 . WELCOMING THE PROGRESS MADE IN DEVELOPMENT CO-OPERATION ON

MANY FRONTS, M IN IST E R S ACKNOWLEDGED THE NECESSITY TO CONTINUE

WORKING WITH DEVELOPING COUNTRIES TOWARDS IMPROVED AND MORE

EFFECTIV E DEVELOPMENT CO-OPERATION P O L IC IE S . THEY AFFIRMED THAT

WHILE DEVELOPMENT CO-OPERATION CONCERNED RELATIONS BETWEEN

GOVERNMENTS I T S O B JEC TIV E WAS THE W ELL-BEING OF IN D IV ID U A L S :

DEVELOPMENT CO-OPERATION SHOULD THEREFORE F U L F IL THE DUAL PURPOSES

OF GROWTH OF INCOMES AND MEETING BASIC NEEDS OF INDIV IDU A LS IN ALL

DEVELOPING CO U N TRIES. THEY STRESSED THAT DEVELOPMENT P O L IC IE S

FOR TRANSFERS OF RESOURCES AND STRUCTURAL CHANGES SHOULD BE CLEARLY

DIRECTED TO TH ESE PURPO SES. T H IS WAS PARTICULARLY NECESSARY IN

ORDER THAT THE O B JEC TIV ES AND POLICY CONCEPTS OF DEVELOPMENT

CO-OPERATION WOULD BE BETTER UNDERSTOOD AND SUPPORTED BY THE

PEOPLES OF IN D U ST R IA L ISE D AND DEVELOPING CO UNTRIES.

5 . M IN IST E R S OF OECD CO UN TRIES, DONORS OF A ID , REAFFIRMED THE

IN TEN TIO N , AS EXPRESSED BY TH EIR COUNTRIES IN D IFFERENT FORA, TO

INCREASE EFFECTIV ELY AND SUBSTANTIALLY T H E IR O F F IC IA L DEVELOPMENT

ASSISTANCE AND TO ACHIEVE AN IMPROVED BALANCE OF TH EIR EFFORTS

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IN T H IS REGARD. THEY ANNOUNCED TH EIR DETERMINATION TO

D IR E C T , IN CO-OPERATION WITH DEVELOPING COUNTRIES, A

PROGRESSIVELY LARGER SHARE OF T H E IR EFFORTS TO PROGRAMMES MEETING

BA SIC HUMAN N EED S. TO R E A L ISE T H IS NEW ORIENTATION WITH RESPECT

TO ALL DEVELOPING CO UN TRIES, THEY ALSO AGREED TO REVIEW THE SCOPE

AND D IRECTIO N OF DEVELOPMENT ASSISTA N CE WITH A VIEW TO ACHIEVING

GREATER VOLUME AND MORE E F F IC IE N C Y IN IT S USE IN AN ENLARGED

INTERNATIONAL E FFO R T.