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Tuesday, 22 August 1972
Page: 267

Senator WILKINSON (Western Australia) - Development is at present very much in the minds of people throughout the world, and particularly the people of Australia, as has been evidenced during the last couple of months by the announcement of a large number of study campaigns by Australians who are concerned with the best way of assisting world development. The Asian Development Bank fits very well into the thinking of people who are concerned with the development of the developing countries, their needs and how best they can be achieved so that we do not just make the richer countries richer and the poorer countries relatively poorer. This can happen when countries set up industries in developing countries to their own benefit. The Asian Development Bank has as its main purpose the making available of funds to countries in the Asian area so that they will be able to improve their productivity and gross national product and raise the standard of living of their people without at the same time creating a greater difference between the richer nations and the poorer nations.

The funds of the Asian Development Bank have reached a point where it is felt that more shares can be taken up by the countries which are subscribing to it. This has been made known to the various countries so that they can consider the proposition and see what they can do to assist in this very worthwhile objective. Australia has the opportunity of taking up the shares to which it is entitled. It is proposed in this Bill that we would increase our subscription to the Bank by $US127.5m of which $US102m would be callable capital. The amount of $US25.5m would be issued over a 3 year period. This will give the Bank an opportunity to extend its operations which it has carried out so well in the past. I notice in the second reading speech of the Minister for Air (Senator Drake-Brockman) a few points to which I wish to draw attention. It is interesting to note that although the Bank was instituted in 1966 it is subscribed to by 37 countries, 23 of which, including Australia, are in the Asian area.

I particularly want to draw attention to the difference between the special operations and ordinary operations of the Bank. Special operations are the sort of assistance which I feel a Bank of this nature should be giving to the countries which are very much in need. Under the special operations category, we find that very long term loans are being made available. The term of the loan varies from 16 to 40 years. The percentage of interest charged on these loans is very realistic. It varies from li per cent to 3 per cent. I feel that this is the sort of accommodation that a developing country really needs. Also, a free period of 4 years to 10 years can be considered in every operation. This represents a very worthwhile effort on the part of the Bank for the benefit of the developing country.

But the ordinary operation of the Bank is not nearly so attractive. Certainly, quite a bit of business is conducted under the ordinary operations. I am sorry that I do not know exactly the difference in the amount that is loaned under ordinary operations and the amount that is loaned under special operations. Possibly the Minister might be able to give me those facts. It would be interesting to have this information to know just where the funds go. Honourable senators will have noticed when I referred to the special operations provisions the long term of the loan, the low interest and the extended free period that apply. These are marked when we look at the ordinary operations under which the rate of interest presently charged on loans is li per cent. The period of repayment extends only from 10 to 25 years. That might be quite attractive by comparison with the other term which was 16 to 40 years. But I understand that in this case the free period extends from 2 to 5 years. This represents quite an important difference and is a matter which I think bears close watching.

These developing countries are very much in need of all the aid that we can give them in a way which enables them to operate properly and improve their capacity to produce without at the same time assisting the aiding countries. We do not require this because we do not want the gap between the countries to extend any more than it is at the present time. We want to reduce the gap. We have in the Asian Development Bank a very worthwhile fund which can be drawn on by the countries in this area. Obviously, they are availing themselves of this fund to a very considerable extent. I think that the amounts that have been paid in by the various countries were shown in the figures that were incorporated in Hansard. The grand total of the present subscription is $US1,005.44m. This shows that the amount is considerable. It represents a worthwhile service to these countries that are interested in applying to the Bank. The Australian Labor Party feels that the extension warrants the taking up of these additional shares by Australia and we support the move. As the Minister pointed out in his second reading speech, each share is valued at SUS10,000. This Bill enables us to take up our share of the additional subscription which is what the Government is proposing to do. I support (he Bill.

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