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Tuesday, 22 August 1972
Page: 268

Senator CARRICK (New South Wales) - The Australian people and the Australian Government should have and, indeed, do have a deep humanitarian interest in the economic development and the well-being of the people of the countries of Asia. It is on that basis that in 1966 the Asian Development Bank was established and Australia became an active and significant member. When the developing nations face their problems of lifting up their peoples economic and social standards by their shoe strings they are all capital hungry countries. They are incapable of generating their own capital internally. They represent bad risks on the ordinary borrowing markets of the world. They are naturally sensitive to seeking loans with strings attached or to investments from foreign companies. They are sensitive, as every country is, to foreign capital and to overtones of implication. Therefore one of the very great services that can be done to the developing countries of Asia is to provide them with funds on specific interest terms and periods of repayment, which have no other strings to them and which they can use for their purposes so that they can preserve their national integrity and sovereignty. I know of no one instrument that can help more on the economic level in Asia than the Asian Development Bank in that regard.

As Senator Wilkinson said, the Bank now has a membership of 37 countries. That is a pretty healthy membership. Twenty-three of those countries, including Australia, are in the Asian region. The Bank has, in terms of subscribed capital, a number of noteworthy countries, and Australia ranks fourth. It ranks third in our region. Only the United States of America, Japan and India subscribe more funds than Australia does. If one looks at the capacity of the individual countries, in terms of their populations and resources, I think Australia can take some quiet pride in the fact that it stands up and is counted. Until now Australia had a subscription capital of $US85m and was ranked fourth. Japan, with a population of 100 million as compared with our 13 million, subscribed $US200m. India subscribed $US93m. India has many internal problems that must be offset against her massive population. Australia's subscription compares with the subscriptions of those countries. It is good that Australia should be doing these things. I commend the Bill as a significant, one.

The background of the Bill is that it became clear to the governors of the Bank in 1971 that they would be. in old fashioned terms, running out of money by 1973. If they were to continue with the quite prodigious rate of expansion of 1971 - by far the Bank's best year - they would need to draw more capital funds and more resources, more backing. So at the annual meeting of the governors of the Bank in 1971 they asked the board to undertake a survey and to make recommendations as to what should bc done. The recommendation was a very substantial one. lt was that they should increase subscriptions by ISO per cent. It should be noted that Australia voted in favour of the recommendation - that is, in favour of the increase in subscription. The Senate should know that member countries are entitled but not obliged to subscribe to the authorised increase. This Bill, which undoubtedly will have the support of all honourable senators, is a Bill to confirm that Australia will stand up and say certain things. We will take up 2,550 paid up shares amounting to $US25.5m over a period of 3 years. We will accept the liability for callable shares of 10,200 amounting to $US102m. We will accept a total subscription liability of 12,750 shares amounting to $US127.5M

This Bill simply says that we authorise the Treasurer to make agreements with the Bank and to pay the Bank in paid up shares, over 3 years, this $US25.5m and to accept the liability for the backing up of the Bank in terms of our other commitments. It also sets out how this money shall be paid because there is an arrangement by which, in the first place, only 20 per cent is to be paid in full and the balance is to remain on call. The method of payment is that 40 per cent is to be in gold or convertible currency and 60 per cent in the member's currency or in promissory notes. That is the proposition. Will we, as an Australian nation and as a very active and prominent member of the Asian Development Bank, work with the recommendation of the governors to increase their amount of capital by 150 per cent? Will we do it to this formula? By this Bill we have said that we will.

It is true, as Senator Wilkinson said, that there are 2 different kinds of loans. The first is the special loan that attracts very low interest rates - something between U per cent and 3 per cent - with very long borrowing periods of between 16 and 40 years. The second is the ordinary loan that attracts something like 7± per cent interest. These loans are the ingredients of the scheme. But I think it goes deeper than that. If one were to ask where this added contribution stands in Australia's bona fides to Asia one would say, as the Minister for Air (Senator Drake-Brockman) said in his second reading speech, that this added contribution is an integral part of our aid programme. We have been pace setters in aid. As the world knows, taking the guideline of one per cent of gross national product, we have proudly exceeded that figure in the years 1970 and 197!. We have accepted a major responsibility n Papua New Guinea. We are continuing lo accept our responsibilities in aid. We do -o on a basic principle. When we give aid. we give it without strings. We ask no backlash of favours for the aid. This point is the important thing if we are to be regarded .is a nation of integrity in Asia. We should not be looking for some cutback on w.>at we are doing - what is well known in Asia as a squeeze. Not only in our ordinary overseas aid, such as the very large increase recently to Indonesia, but also in the Asian Development Bank we have adopted that principle. We have said: Here is money. You can borrow it and you use it in your country. It will give you the power to strengthen your sinews. You will be helping yourself. Because internally you cannot find these resources, because you are not a good credit risk on the world market and because you have your fears and your fretfulness about taking in an overdue amount of foreign capital. K-re is a way we can help'. That aid is only one of the stepping stones. I believe that it will extend. I believe that the amount provided under this Bill, over the next 3 to 5 years, will prove to be not enough. P-it it is a step foward. I commend the lilli to the Senate.

Sitting suspended from 5.45 to 8 p.m.

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