eneral
JNITED
NATIONS D1str. GENERAL
:;ENERAL
A/AC.35/S R•212 29 March 1900
~SSEMBLY
ENGLISH ORIGINAL:
FRENCH
COMMITTEE ON INFORMATION FROM NON -SELF-GOVERNING TERRITORIES
SUMMARY REI;ORD OF' THE TWO HUNDRED AND J:WELFTH MEETING
Held at Headquarters, New York, on Friday, 4 March 19(;0, at 10.55 a.m. CONTENTS
Economic conditions in Non-Self-Governing Territories (continued): (a)
Trade and financial relations of TIon-Self-Governing Territories (A/AC.35/L.317)
(A/AC.35/L.314) (c) Money and central banking (A/AC. 35/L. 315) (b)
Terms of trade
(d)
Participation of indigenous population in the production and distribution of goods
(e)
Productivity of indigenous labour
(A/AC.35/L.316)
I
60-06759
.
,...
A/AC.35/sR.212 English Page 2
PRESENT: Chairman:
Mr. QUAISON-SACKEY
(Ghana)
Rapporteur:
Mr. BACON
Members:
Mr. ORTIZ de ROZAS
(United States of America) Argentina
Mr. CURTIS
Australia
Mr. GIBSON-BARBOZA Mr. KANAKARATNE
Brazil Ceylon
Mr. de CAMARET
France
Mr. DADZIE
Ghana India Iraq
Mr. MITRA
Miss KAMAL Mr. GOEDHARl' Mr. WATr Mr. BROWNING •) Mr. WILLIAMSON) Mr. SPALDING) Mr. GAY ) Represente~Jves
Secretariat:
Netherlands New Zealand United Kingdom of Great Britain and Northern IrelanJ United States of America
of specialized agencies: Mr. KHAN
International Labour Organisation
Mr. ACHARY.\
Food and Agriculture Organization
Miss PROCTOR
United Nations Educational, Scientific and Cultural Organization Secretary of the Committee
Mr. KUNST
I···
A/AC.35/sR.2l2 English Page 3 ECONOMIC CONDITIONS IN NON-SELF-GOVERNING TERRITORIES (continued): (a)
TRADE AND FINANCIAL RELATIONS OF NON-SELF-GOVERNING TERRITORIES
(A/AC.35/L.317) (b)
TERMS OF TRADE (A/AC.35/L.314)
(c)
MONEY AND CENTRAL BANKING (AI AC. 35/L. 315)
(d)
PARTICIPATION OF INDIGENOUS POPULATION IN THE PRODUCTION AND DISTRIBUTION OF GOODS
(e)
PRODUCTIVITY OF INDIGENOUS LABOUR (AI AC. 35/L. 316) Mr. GAY (United States of America); referring to the statements made
during the general debate on the report on progress achieved, noted that) despite the 0vidence of economic progress in the Non-Self-Governing Territories, many prcblems were st tll unresolved.
There was nothing strange about that: economic
development was a complex nhenomenon; it was difficult to achieve steadily and at the rate desired, although sometimeo it surged ahead with surprising rapidity. Never before, perhaps, had there been so much international co-operation with a view to its attainment.
For instance, the Government of the United States of
America had in 1959 pr'C ,ided about 3,000 million dollars in economic aid to many parts of the globe. The problem arising with regard to the economic development of the Non-SelfGoverning Territories needed to be studied in the context of the world economic situation.
While there were a few points of
diffe~nce,
those problems were
similar to the problems arising in all the under-developed countries; even in those which had already achieved independence) and the policies adopted for their solution, by both industrlal:tzed countries and international organizations, had much in common.
With regard to the world economic situation, vast changes
had taken place since the Committee had last examined economic conditions in the Nun-Self-Governing Territories.
The third post-war recession had been of short
duration and the SUbsequent economic recovery had given weight to the view that the industrialized countries had made progress in their ability to resist dO'WIlward trends.
Another important development, namely, the adoption of
convertibility by fourteen European countries, had taken place during that period. That was a notable step toward a truly multilateral system of payments, from which all countries, developed or less developed, would surely benefit.
I ...
A/AC.35/SR.212 English Page 4 (Mr. Gay, United states) While inflation probably did not present the acute problem it had done a few years before} the threat had not entirely disappeared.
Many of the primary
producing countries had taken measures to check inflationary pressures, some in spite of balance of payments difficulties.
The International Monetary Fund had
played an increasingly helpful role in that respect.
Moreover, many industrialized
countries had completed the reconstruction of their economies, so that they could play a more active role in the economic development of the under-developed countries .
Finally, the state of the United states economy was of general inte re Ft ,
In spite of some unfavourable trends, the past year had been marked by a substantial increase in the gross national product of the United States J which hM risen to about 478,000 million dollars, i.e., an increase of 8 per cent over 1958. The recession had not materially affected the demand for imports, and the increase in imports of industrial raw materials was no doubt related to the increase in the volume of exports of many non-industrial countries and the strengthening of their foreign exchange reserves. The economic progress achieved by the Non-Sell-Governing Territl,ries was partly due to the general strengthening of the world economy.
While the basic
pattern of the economy of those Territories had not materially changed and was still mainly characterized by subsistence agriculture and the production of a few primary products for export, there had been progress towards broadening production tor the market and even some production of capital goods.
Consumption had
increased b.'1.d there was a wider distribution of markets for exports as well as of sources of supply for imports, indicating a decreased dependence on trade with metropolitan countries.
Those were unmistakable signs of progress in the
economies of the Territories. The efforts made by the Administering Powers to develop the Territories economically, in particular through the prOVision of substantial financial assistance, had largely been reflected in the continued production and export of primary products, the demand far which had been increasing on the world market. They had, however, also produced some movement towards the diversification of the economies of the Territories and towards the encouragement of industrialization, which was still only in its infancy, and of agricultural production for the
/ ...
A/AC. 35/SR. 212 English rage 5 (Mr. Gay, United states) domestic market.
Those efforts had been made within the framework of comprehensive
development programmes, which did not overlook the requirements of a balanced development and had aimed not only at improving the level of living of the indigenous population, but' also at increasing their participation in economic activity. The importance of diversification of the economy should not, of course, be allowed to obscure certain fundamental facts relating to the economies of those countries, which had for so long been based on agriculture and the production of primary commodities for export.
Diversification might be costly, particularly in
the initial stages, as it depended upon relatively large expenditure on infrastructural development, which might not result in an immediate increase in the production of consumer goods or in enlargement of the tax base; external asaistance l partiCUlarly in the form of loans, was frequently needed.
Moreover, economic
development policies should not overlook the importance of stimulating such economic activity, either in primary or industrial production, as the Territories were best fitted to undertake.
That principle apparently had not been overloo.ted.
He noted from the documentation before principles and objecti ''eS ef economic importa'.lt trends, which deserved
~he
PO:.iC~f
co~entJ
Committee that, while the
ba~ic
hE'.':" undergone little chfnge,
h!\d become evident.
the size of the programmes had been generally expanded.
That
SE
veral
In the first place, seelI\~n
to indicate
that either the potentialities for growth or the availability of resources, or both, were greater than had been anticipated.
In the second place, there was an
increasing emphasis on the type of project most likely to bring a1,out a rapid and direct increase in production, and hence an inc:cease in taxable income.
A proper
balance within the framework of the programmes between longer and shorter range returns was of' the utmost importance. Another recent characteristic observed in the report was the reliance on shorter term planning.
There was a growing awareness of the need for flexibility
in planning and carrying out economic development programmes.
The factors
impinging on economic development were in a state of flUX, and were dynamic and sometimes non-economic in character.
Therefore, "'igid long-term planning had
definite disadvantages, one of which was the need for occasional costly adjustments.
/ ...
A/AC.35/SR.2l2 English Page 6 (Mr. Gay, United states) Accordi1.g to the report, private
ente~rise
and investment, which had
hitherto been generally relied on to ensure economic development, could no longer produce the desired results.
That view was the basis, presumably, for the present
trend toward comprehensive development planning.
He felt that private investment
could or should not be excluded from the development programmes and considered only as a useful complement to pUblic investment.
Experience had shown that
development was considerably affected by the extent to which private capital was attracted to producti ve investment.
Private investment should therefore be
considered as an essential component of development programmes.
If maximum
development was the objective, such programmes should include an evaluation of the potentialities of the private sector - domestic or foreign - and should aim at maximizing its contribution.
The United states Government held the view that, to
the greatest possible extent, foreign capital assistance should come from private investOrs and from the international lending institutions.
Private investment
could provide much more than Governments in the way of funds and the private investor was frequently better able to ferret out opportunities for productive investment and provide effective technical assistance. An important step obViously was to establish an adequate infrastructure pewer production, transport facilities, etc. - bearing in mind its effect on p~"ivate
investment.
Too much emphasis on that type of development might, of
course, raise other problems, such as balance of payments difficulties and intlatj onary trends.
This all. shows how difficult it is to allocate resources so
as to ensure a rapid, maximum, properly balanced economic development.
The United
States recognized that many of the less developed countries, including the NonSelf-Governing Territories, did not possess adequate resources to prOVide the desired impetus for economic development.
That was why the United States supported
such international institutions as the International Bank and had instituted its own development assistance programmes, partiCUlarly the Development Loan Fund.
/ ...
A/AC.35/SR.212 English Page 7
(8)
TRADE AND FINANC IAL REIATIONS OF NON-SELF-GOVERNING TERRITORIES
(A/AC.35/L.317) Mr. DADZIE (Ghana) began ?y drawing the ComILittee's attention to a
question which, he felt, had received insufficient consideration, namely the impact of the European Economic Community on the trade relations of the Non-SelfGoverning Territories.
In view of the fact that the signatories of the Rome
Treaty had decided to associate their overseas territories with the European Economic Community, it was likely that the preferential treatment of imports from the territories associated with the Community would divert trade to those territories to the disadvantage of other exporters, including the non-associated territoriee.
The urgency of the !,roblem stemmed from the fact that a large part
of the export earnings of many territories ws derived from their exports, to the Community countries, of raw materials also exported by associated territories. For instance, the United Kingdom territories 1n East Africa derived one third of their export earnings from their coffee exports to the Community countries and half of Angola t B export earnings were derived :from coffee exports to the He realized that the threat was, for the IOOment, only potential,
same countries.
but there was little doubt that it would materialize as soon as the associated territories began to benefit from the preferential provisions of the Rome Treaty. In the long run, however, it was not certain that those preferential provisions would. really be advantageous to the associated territories, for there was a
danger of those territories caing gradually integrated into the Community's economic system and thus being prevented from either diversifying their econoDW or becoming industrialized. Turning to the subject of the terms of trade, he said that he recognized. that the Administering Powers had frequently taken steps to reduce the effects of fluctuations in the terms of trade by such devices as guaranteed price schemes and marketing programmes.
However, although such schemes and programmes
stabilized the prices paid to producers I they couJ.d have no effect on world market prices or, therefore, on the terms of trade.
Sometimes, as in Uganda,
a partial remedy for that defect had been found by diversifying exports.
That
..
I··.
A/AC.35/SR.212 Enc;lish Page 8
(Mr.
Dadzie, Ghana) i~
was an example which, l:'.~1d
his deleGation's view, should be followed elsewhere
even extended to imports, so that the N:::;n-Self-Governing Territories could
procure the go;:>ds they :-:eeded, such as He deplored the fact that}
te;~t iles 1
at the lowest prices.
notwithstrndin~; the
recommendations of the
Economic and S;;ciel Cc;uncil and the General _'_sse.l:lbl;i, the Administering Powers had been unable to stabilize the commodity aGreements}
e;~ce:9t
p~ices ~f ~~inary ~roducts
in the case of su:ar and tin.
\fuere aGriculture Has concerned, the ~roduction.
In that
through international
c~~~exion,
:110St
;;>ressinG need was to diversify
he pointed out that although Uganda} for
im:tance, now produced tea and coffee besic:"es cotton} Gambia we.s still 90 ::.)er cent dependent on its
e;~:,!orts
of groundnuts.
In order to diversify production,
Government initiative vres essential in most cases and should be based on
~esearch:
it was necessary to ascertain the potentialities of the soil, introduce neu crops or
hi~r
yieldinG varieties and to combrx
research had been
develo~ed)
~l~nt
end animal diseases.
Ad~ittedly,
but it would heve been more fruitful if sreater
advantage had been t8.!;:.en of the facilities offered by FAO and other intern:::.tional bodies. In the second place; it was subsistence to a JTlP-rket economy. prerequisite.
necessar~r t~
ensure the transition from a
There again, Government initiative '\-las a
Inrne.ny territories} the inac1.ee:t:uacy or the hiGh cost of transport
was the principal hano.ica:?: in others, the absence of marketing facilities. was needed, therefore)
10[['5
\fuat
to build roads} storaie facilities and :orocessin::;
:!?lants, preferably in connexion '\-lith bror0. !>ro::;rammes of conununity develo!,pent. Mr. \-IILLD:l.1S0rI (United KinGdom) said that he had listenecl with interest
to the statements of the re9resenta.ti ve of the United states and the representative of Ghana aJ"l.d would like to re:D1y to two observations made b:." the latter.
The first concerned terms of trade; he would deal with that nc.tter
durin3 the consicl.eratt·,n of item 5 (b) of the e.c;enda. Gambia.
The second concerned
The two maj or schemes put into o!.Jeration in an attempt to diversify the
economy of that Territory - the schemes for develo9ing rice-growing and poultrybreedi~g
- had failed.
Furthermore) investisation had show that the deposits of
a certain mineral fotU1d in Gambia's subsoil were not commercially
/ ...
A/AC. 35/SR. 212
(Mr. exploitable.
English Page 9 Williamson, United Kingdom)
It seemed, therefore, that for the time being Gambia would have to
continue to concentrate mainly on the cultivation of groundnuts. He recalled, in that connexion, the case of Mauritius, whose economy was also based in large part on a single product - sugar.
The conclusions of the
expert survey mission which was to undertake an inquiry into the Territory's economy would certainly be interesting.
The experts might conceivably consider
that, since diversification programmes would be expensive, the present situation, Which was relatively satisfactory owing to the fact that production was
t~
~.'ationally
the existence of guaranteed markets and organized, had definite advantages.
Furthermore, although it might be desirable in certain cases to diversify production for the salee of exports, there was another problem,that of malnutrition, Which must not be overlooked.
Whatever was done about export crops, it was
important that more and better food should also be produced for local consumption. Lastly, he drew attention to the encouraging example of Ghana, whose resources still depended to a large extent on cocoa exports. He
,~nt
on to make some cOlI!lIlents on the report on the balance of payments of'
Non-Self-Governing Territories with the respective metropolitan countries
(A/AC.35/L.317), which he considered excellent. One important general point emerged from the report:
the divergent patterns of trade betw'een the Territories
and the United Kingdom and the fact, indicated in paragraph 60 of the report, of the general decrease in the Territories' dependence on trade with the metropolitan country, showed that the United Kingdom Territories were perfectly tree to choos& their suppliers and their purchasers.
As table 3 of the report indicated, for
example, the share of the United Kingdom in Nigeria's exports had declined from
78.2 per cent in 1952 to 55.5 per cent in 1958J and the United Kingdom's share in that Territory's imports had fallen trom 52.2 per cent to 43.9 per cent over the same period. Similarly, table 5 indicated that the share of the United Kingdom in the exports of Kenya had been 31 per cent in 1949 and 29 per cent in 1958 and that during the sane period the United Kingdom's share in that Territory I s imports had fallen from
77 per cent to 36 per
~ent.
I ...
A/AC.35/SR.2l2 English Page 10 (Mr. Williamson, United Kin~dom) There were only two exceptions to the freedom of trade of the United Kingdom Territories.
The first, which was of no great importance, related to exports:
the United Kingdom Territories, like those of other western countries, restricted their exports of certain strategic commodities to certain countries.
The second
restriction concerned - or, more accurately, had concerned - imports.
After the
war the Territories
j
lil:e other countries in the s·cerling area, had applied to
imports discriminatury measures designed to protect the balance of payments of the sterling area as a progressively modified.
,~ole.
Those systems of control had, however, been
Thus, during the period under review, the Territories had
liberated over 90 per cent of their imports from CEEC countries, and after the Commor 3alth Trade and Economic Conferenl_c of 1958 they had allowed imports of most raw materials and machinery from countries in the dollar area. He might add that for so~e years now the Territories dependent on the United Kingdom had been able to purchase dollar goods whenever they were essential to their reqUirements and could not be obtained from other sources at competitive prices. r.S a result of the strengthening of the pound sterling the necessity for such disc...c 1.minatory measures as had remained had now disappeared, and in November 1959 the Governments of the Territories had been informed that the United Kingdjm Government no longer wished to justify any of its restrictions on balance of payrcents found and they were advised that they could, in particular, remove any discrimination which they still practised against the dollar area. Certain territorial Governments would no doubt wish to maintain quantitative restrictions on certain imports, principally for the protecti.on of local industries, but their decisions would hence_~rward be dictated by their om1 needs only. In that connexion he wished to stress that the grants and loans made by the United Kingdom Government under the Colonial Development and vielfare Acts were in no way tied to United Kingdom exports, whether of goods or serv_ces. In conclusion, he had ~w0 coservations to make on paragraphs 17 and 24 of the report.
In paragraph 17 he considered that the text would reflect the situation
more accurately if' the last sentence were amended to read: "It was of course the inflow of' capital that gave rise to the over-all deficit in their balance of payments on current account." Secondly, he thought that it would be preferable to use the word "changed l ! instead of "deteriorated" in the first sentence of paragraph 24. Nigeria had been spending some of' its sterling balances on development. That was partly what they were originally built up for.
/ •.•
A/Ac.35/sR.212 English Page 11 Mr. DADZIE (Ghana), replying to the representative of tl:e United Kingdom,
agreed that it was necessary to take account of local conditions. bis statement could be interpreted as
meaDi~g
the contrary.
Nothing in
With regard to
Gambia, he regretted the failure of the schemes to which the United Kingdom representative had referred.
It was possible, however, that more extensive
research C?ud bet·cer organized popularization services would have ensured the success of those schemes. ~employment
Improved organization would help to combat the
to which rural labour was subject.
As to the fact that Ghana had a prosperous eronomy based primarily on the cultivation oi' a single crop, that was not a convincing argument against the diversification of crops and (b)
producti~n.
TERMS OF TRADE (AI AC. 35/L. 314) r~ss Y~MAL (Iraq) drew attention to the important role played by external
trade in the economies of most of the Non-Self-Governing Territories, a very high percentt
c
c;f whose gross national products
export trade.
- 40 per cent in some cases - was
The economies of those Territories were based on
directed
tr)
tL~
the sale
0 ..
pr-lmary commodities, the world prices of which were subject to sharp
fluctuations
(:~t,ermined
by the volume oJ..' demand.
The Non-Self-Governing
Territories were powerless to control eicher the volume of that demand, which depended on the needs of the industrialized countries, or the volume of supply, since, with very few exceptions, the major sources of those commodities were not in the Non-Self -Governing Territories. Some Territories had taken steps to moderate the unfavourable effects of world price fluctuations - di versii'ication of crops, adaptation of production to lIlarket conditions - and the marketing beards had been useful to some extent. Nevertheless, ·'.:,he basic problem was still unsolved and the Ncn-Self-Governing Territories remained economically vulnerable. The Non-Self-Governing Territories were faced With another
problem~
in
order to carry out their development programmes they were obliged to import increasing quantities of machinery and capital goods, the prices of which had been r5.eillg steadily becd-use of inflationary pressures in the economically advanced countries.
That factor, in addition to the fluctuations of commoaity
I.··
A/AC.35/sR.212 English Page 12 (Miss Kamal z Iraq) prices in the world market, led to a chronic imbalance of trade and earnings. Thus in 1957 the East African Territories under United Kingdom administration had had a deficit of £22 million, while in 1958 French Equatorial Africa had had a deficit amounting to $46 million and French West Africa one of $70 million. Her delegation reserved the right to revert to the question in the course of the discussion. ~~. WILLIAMSON (United Kingdom) replying to the Iraqi representative,
pointed out that a trade balance deficit was not necessarily an unfavourable factor.
That was true in particular of the Territories which were in need of
capital development and investment from oversee,s p,ncl f:Jr '\,hich a balanced foreign trade v~uld ce a sympton of stagnation. Referring to paragraphs 39, 41 and 43 of the report (A/AC.35/L.314), he recalled that he had already dealt with the qu~stion of price s"l,abilization in some detail in his preliminary statement. He would~ however, point out that since the war the United Kingdom's commodity policy had been based on the principles set forth in chapter VI of the Havana Charter.
Inter-governmental
action might, of course, be needed in order to smooth away special difficulties peculiar to commodity production and trade, by preventing or moderating short-term fluctuations which served no useful economic purpose and by easing the transition to alternative production.
It was important in such cases that producers and
consumers should discuss together the steps to be taken and should participate on an equal footing in any inter-governmental commodity agreement which might be reached after a thorough study of the problem.
Those were the principles
followed by the United Kingdom, which would like to see an increase in multilateral trade and the solution of commodity problems by mutual consent in such a way as not to ignore long-term trends or aggravate a prevailing diseqUilibrium. In his delegation's view, the interests of the co~odity exporting Territories could best be served by maintaining economic activity at a high level and promoting its expansion both generally and in the importing industrialized countries.
The United Kingdom's policies had been designed to that end.
His
Government was well aware of the serious prcblems '\-,hich coul(, be caused by wide fluctuations in commoiity prices and was prepared to participate in any examination of such problems on a commodity by commodity basis.
In view of
the fact that the problems varied widely from one commodity to another, that was the only way of achieving worth-while results.
I ..·
A/AC.35/SR.212 English Page 13 (Mr. Williamson, United Kingdom) The United Kingdom participated in four of the five international commodity agreements now in torce, namely those on sugar, tin, wheat and olive oil. With regard to the coffee agreement it had made a unilateral declaration to the effect that, subject to the Agreement of the local Governments, its -best endeavours would be used to restrict exports of coffee from its East African territories during the current coffee year.
The Governments of Kenya, Tanganyika and Uganda had since
stated that they would agree to limit their exports of coffee during the period from 1 October 1959 to 30 Septenber 1960.
In addition, the United Kingdom and its
East African Territories were at present taking part in the work of the coffee study group and had been foremost in advocating that a study of the long-term position should be made.
The United Kingdom was also participating in the work of
the other commodity study groups, such as those on cotton, cocoa, rubber, rice, coconut and coconut products, lead and zinc, wool and grains.
Moreover, in
confor.mity with its desire for increased multilateral trade and in the interests of primary producing countries, the United Kingdom had participated in the establishment of committees, within the framework of GATT, Which were studying the problems of agricultural protectionism in the industrial countries and other impediments to the trade of under-developed countries. While its advice was at all "tiimes available to the Territories for which it was responsible, the United Kingdom left them entirely free to decide whether or not to participate in international commodity agreements.
All the sugar-exporting
and most of the sugar-importing Territuries were participating in the International Sugar Agreement. Most of the Territories were participating as importers in the International Wheat Agreement.
Nigeria was participating in the International Tin
Agreement as a producer, With separate representation.
With regard to the Olive
Oil Agreement, Cyprus was the only Territory 'W.lich might be much interested in participating, but in view of its forthcoming independence it seemed preferable to leave a decision on the sUbject to the Government of the new republic. He went on to question some of the statements made in paragraphs 41 and 42 of the report (A/AC.35/L.314).
Far from acting collectively to maintain the prices of
their exports at a high level, the industrial countries generally competed With each other on the market, to the advantage of the purchasers.
/
...
A/AC.35/SR.212
English Pa.ge 14
(Mr.
Williamson, United Kingdom) Paragraph 46 spoke correctly of the part played by the marketing boards in
stabilizing prices paid to producers.
He was not sure, however, that he could
agree with the conclusion dra'WIl in the second sentence of the paragraph.
The
sale of connnodities through central organizations might have had a by no means negligible influt::nce on the level of prices in the world markets. would like to hear the views of other delegations on that point. ~~e
meeting rose at 12.25 p.m.
His delegation
NATIONS D1str. GENERAL
:;ENERAL
A/AC.35/S R•212 29 March 1900
~SSEMBLY
ENGLISH ORIGINAL:
FRENCH
COMMITTEE ON INFORMATION FROM NON -SELF-GOVERNING TERRITORIES
SUMMARY REI;ORD OF' THE TWO HUNDRED AND J:WELFTH MEETING
Held at Headquarters, New York, on Friday, 4 March 19(;0, at 10.55 a.m. CONTENTS
Economic conditions in Non-Self-Governing Territories (continued): (a)
Trade and financial relations of TIon-Self-Governing Territories (A/AC.35/L.317)
(A/AC.35/L.314) (c) Money and central banking (A/AC. 35/L. 315) (b)
Terms of trade
(d)
Participation of indigenous population in the production and distribution of goods
(e)
Productivity of indigenous labour
(A/AC.35/L.316)
I
60-06759
.
,...
A/AC.35/sR.212 English Page 2
PRESENT: Chairman:
Mr. QUAISON-SACKEY
(Ghana)
Rapporteur:
Mr. BACON
Members:
Mr. ORTIZ de ROZAS
(United States of America) Argentina
Mr. CURTIS
Australia
Mr. GIBSON-BARBOZA Mr. KANAKARATNE
Brazil Ceylon
Mr. de CAMARET
France
Mr. DADZIE
Ghana India Iraq
Mr. MITRA
Miss KAMAL Mr. GOEDHARl' Mr. WATr Mr. BROWNING •) Mr. WILLIAMSON) Mr. SPALDING) Mr. GAY ) Represente~Jves
Secretariat:
Netherlands New Zealand United Kingdom of Great Britain and Northern IrelanJ United States of America
of specialized agencies: Mr. KHAN
International Labour Organisation
Mr. ACHARY.\
Food and Agriculture Organization
Miss PROCTOR
United Nations Educational, Scientific and Cultural Organization Secretary of the Committee
Mr. KUNST
I···
A/AC.35/sR.2l2 English Page 3 ECONOMIC CONDITIONS IN NON-SELF-GOVERNING TERRITORIES (continued): (a)
TRADE AND FINANCIAL RELATIONS OF NON-SELF-GOVERNING TERRITORIES
(A/AC.35/L.317) (b)
TERMS OF TRADE (A/AC.35/L.314)
(c)
MONEY AND CENTRAL BANKING (AI AC. 35/L. 315)
(d)
PARTICIPATION OF INDIGENOUS POPULATION IN THE PRODUCTION AND DISTRIBUTION OF GOODS
(e)
PRODUCTIVITY OF INDIGENOUS LABOUR (AI AC. 35/L. 316) Mr. GAY (United States of America); referring to the statements made
during the general debate on the report on progress achieved, noted that) despite the 0vidence of economic progress in the Non-Self-Governing Territories, many prcblems were st tll unresolved.
There was nothing strange about that: economic
development was a complex nhenomenon; it was difficult to achieve steadily and at the rate desired, although sometimeo it surged ahead with surprising rapidity. Never before, perhaps, had there been so much international co-operation with a view to its attainment.
For instance, the Government of the United States of
America had in 1959 pr'C ,ided about 3,000 million dollars in economic aid to many parts of the globe. The problem arising with regard to the economic development of the Non-SelfGoverning Territories needed to be studied in the context of the world economic situation.
While there were a few points of
diffe~nce,
those problems were
similar to the problems arising in all the under-developed countries; even in those which had already achieved independence) and the policies adopted for their solution, by both industrlal:tzed countries and international organizations, had much in common.
With regard to the world economic situation, vast changes
had taken place since the Committee had last examined economic conditions in the Nun-Self-Governing Territories.
The third post-war recession had been of short
duration and the SUbsequent economic recovery had given weight to the view that the industrialized countries had made progress in their ability to resist dO'WIlward trends.
Another important development, namely, the adoption of
convertibility by fourteen European countries, had taken place during that period. That was a notable step toward a truly multilateral system of payments, from which all countries, developed or less developed, would surely benefit.
I ...
A/AC.35/SR.212 English Page 4 (Mr. Gay, United states) While inflation probably did not present the acute problem it had done a few years before} the threat had not entirely disappeared.
Many of the primary
producing countries had taken measures to check inflationary pressures, some in spite of balance of payments difficulties.
The International Monetary Fund had
played an increasingly helpful role in that respect.
Moreover, many industrialized
countries had completed the reconstruction of their economies, so that they could play a more active role in the economic development of the under-developed countries .
Finally, the state of the United states economy was of general inte re Ft ,
In spite of some unfavourable trends, the past year had been marked by a substantial increase in the gross national product of the United States J which hM risen to about 478,000 million dollars, i.e., an increase of 8 per cent over 1958. The recession had not materially affected the demand for imports, and the increase in imports of industrial raw materials was no doubt related to the increase in the volume of exports of many non-industrial countries and the strengthening of their foreign exchange reserves. The economic progress achieved by the Non-Sell-Governing Territl,ries was partly due to the general strengthening of the world economy.
While the basic
pattern of the economy of those Territories had not materially changed and was still mainly characterized by subsistence agriculture and the production of a few primary products for export, there had been progress towards broadening production tor the market and even some production of capital goods.
Consumption had
increased b.'1.d there was a wider distribution of markets for exports as well as of sources of supply for imports, indicating a decreased dependence on trade with metropolitan countries.
Those were unmistakable signs of progress in the
economies of the Territories. The efforts made by the Administering Powers to develop the Territories economically, in particular through the prOVision of substantial financial assistance, had largely been reflected in the continued production and export of primary products, the demand far which had been increasing on the world market. They had, however, also produced some movement towards the diversification of the economies of the Territories and towards the encouragement of industrialization, which was still only in its infancy, and of agricultural production for the
/ ...
A/AC. 35/SR. 212 English rage 5 (Mr. Gay, United states) domestic market.
Those efforts had been made within the framework of comprehensive
development programmes, which did not overlook the requirements of a balanced development and had aimed not only at improving the level of living of the indigenous population, but' also at increasing their participation in economic activity. The importance of diversification of the economy should not, of course, be allowed to obscure certain fundamental facts relating to the economies of those countries, which had for so long been based on agriculture and the production of primary commodities for export.
Diversification might be costly, particularly in
the initial stages, as it depended upon relatively large expenditure on infrastructural development, which might not result in an immediate increase in the production of consumer goods or in enlargement of the tax base; external asaistance l partiCUlarly in the form of loans, was frequently needed.
Moreover, economic
development policies should not overlook the importance of stimulating such economic activity, either in primary or industrial production, as the Territories were best fitted to undertake.
That principle apparently had not been overloo.ted.
He noted from the documentation before principles and objecti ''eS ef economic importa'.lt trends, which deserved
~he
PO:.iC~f
co~entJ
Committee that, while the
ba~ic
hE'.':" undergone little chfnge,
h!\d become evident.
the size of the programmes had been generally expanded.
That
SE
veral
In the first place, seelI\~n
to indicate
that either the potentialities for growth or the availability of resources, or both, were greater than had been anticipated.
In the second place, there was an
increasing emphasis on the type of project most likely to bring a1,out a rapid and direct increase in production, and hence an inc:cease in taxable income.
A proper
balance within the framework of the programmes between longer and shorter range returns was of' the utmost importance. Another recent characteristic observed in the report was the reliance on shorter term planning.
There was a growing awareness of the need for flexibility
in planning and carrying out economic development programmes.
The factors
impinging on economic development were in a state of flUX, and were dynamic and sometimes non-economic in character.
Therefore, "'igid long-term planning had
definite disadvantages, one of which was the need for occasional costly adjustments.
/ ...
A/AC.35/SR.2l2 English Page 6 (Mr. Gay, United states) Accordi1.g to the report, private
ente~rise
and investment, which had
hitherto been generally relied on to ensure economic development, could no longer produce the desired results.
That view was the basis, presumably, for the present
trend toward comprehensive development planning.
He felt that private investment
could or should not be excluded from the development programmes and considered only as a useful complement to pUblic investment.
Experience had shown that
development was considerably affected by the extent to which private capital was attracted to producti ve investment.
Private investment should therefore be
considered as an essential component of development programmes.
If maximum
development was the objective, such programmes should include an evaluation of the potentialities of the private sector - domestic or foreign - and should aim at maximizing its contribution.
The United states Government held the view that, to
the greatest possible extent, foreign capital assistance should come from private investOrs and from the international lending institutions.
Private investment
could provide much more than Governments in the way of funds and the private investor was frequently better able to ferret out opportunities for productive investment and provide effective technical assistance. An important step obViously was to establish an adequate infrastructure pewer production, transport facilities, etc. - bearing in mind its effect on p~"ivate
investment.
Too much emphasis on that type of development might, of
course, raise other problems, such as balance of payments difficulties and intlatj onary trends.
This all. shows how difficult it is to allocate resources so
as to ensure a rapid, maximum, properly balanced economic development.
The United
States recognized that many of the less developed countries, including the NonSelf-Governing Territories, did not possess adequate resources to prOVide the desired impetus for economic development.
That was why the United States supported
such international institutions as the International Bank and had instituted its own development assistance programmes, partiCUlarly the Development Loan Fund.
/ ...
A/AC.35/SR.212 English Page 7
(8)
TRADE AND FINANC IAL REIATIONS OF NON-SELF-GOVERNING TERRITORIES
(A/AC.35/L.317) Mr. DADZIE (Ghana) began ?y drawing the ComILittee's attention to a
question which, he felt, had received insufficient consideration, namely the impact of the European Economic Community on the trade relations of the Non-SelfGoverning Territories.
In view of the fact that the signatories of the Rome
Treaty had decided to associate their overseas territories with the European Economic Community, it was likely that the preferential treatment of imports from the territories associated with the Community would divert trade to those territories to the disadvantage of other exporters, including the non-associated territoriee.
The urgency of the !,roblem stemmed from the fact that a large part
of the export earnings of many territories ws derived from their exports, to the Community countries, of raw materials also exported by associated territories. For instance, the United Kingdom territories 1n East Africa derived one third of their export earnings from their coffee exports to the Community countries and half of Angola t B export earnings were derived :from coffee exports to the He realized that the threat was, for the IOOment, only potential,
same countries.
but there was little doubt that it would materialize as soon as the associated territories began to benefit from the preferential provisions of the Rome Treaty. In the long run, however, it was not certain that those preferential provisions would. really be advantageous to the associated territories, for there was a
danger of those territories caing gradually integrated into the Community's economic system and thus being prevented from either diversifying their econoDW or becoming industrialized. Turning to the subject of the terms of trade, he said that he recognized. that the Administering Powers had frequently taken steps to reduce the effects of fluctuations in the terms of trade by such devices as guaranteed price schemes and marketing programmes.
However, although such schemes and programmes
stabilized the prices paid to producers I they couJ.d have no effect on world market prices or, therefore, on the terms of trade.
Sometimes, as in Uganda,
a partial remedy for that defect had been found by diversifying exports.
That
..
I··.
A/AC.35/SR.212 Enc;lish Page 8
(Mr.
Dadzie, Ghana) i~
was an example which, l:'.~1d
his deleGation's view, should be followed elsewhere
even extended to imports, so that the N:::;n-Self-Governing Territories could
procure the go;:>ds they :-:eeded, such as He deplored the fact that}
te;~t iles 1
at the lowest prices.
notwithstrndin~; the
recommendations of the
Economic and S;;ciel Cc;uncil and the General _'_sse.l:lbl;i, the Administering Powers had been unable to stabilize the commodity aGreements}
e;~ce:9t
p~ices ~f ~~inary ~roducts
in the case of su:ar and tin.
\fuere aGriculture Has concerned, the ~roduction.
In that
through international
c~~~exion,
:110St
;;>ressinG need was to diversify
he pointed out that although Uganda} for
im:tance, now produced tea and coffee besic:"es cotton} Gambia we.s still 90 ::.)er cent dependent on its
e;~:,!orts
of groundnuts.
In order to diversify production,
Government initiative vres essential in most cases and should be based on
~esearch:
it was necessary to ascertain the potentialities of the soil, introduce neu crops or
hi~r
yieldinG varieties and to combrx
research had been
develo~ed)
~l~nt
end animal diseases.
Ad~ittedly,
but it would heve been more fruitful if sreater
advantage had been t8.!;:.en of the facilities offered by FAO and other intern:::.tional bodies. In the second place; it was subsistence to a JTlP-rket economy. prerequisite.
necessar~r t~
ensure the transition from a
There again, Government initiative '\-las a
Inrne.ny territories} the inac1.ee:t:uacy or the hiGh cost of transport
was the principal hano.ica:?: in others, the absence of marketing facilities. was needed, therefore)
10[['5
\fuat
to build roads} storaie facilities and :orocessin::;
:!?lants, preferably in connexion '\-lith bror0. !>ro::;rammes of conununity develo!,pent. Mr. \-IILLD:l.1S0rI (United KinGdom) said that he had listenecl with interest
to the statements of the re9resenta.ti ve of the United states and the representative of Ghana aJ"l.d would like to re:D1y to two observations made b:." the latter.
The first concerned terms of trade; he would deal with that nc.tter
durin3 the consicl.eratt·,n of item 5 (b) of the e.c;enda. Gambia.
The second concerned
The two maj or schemes put into o!.Jeration in an attempt to diversify the
economy of that Territory - the schemes for develo9ing rice-growing and poultrybreedi~g
- had failed.
Furthermore) investisation had show that the deposits of
a certain mineral fotU1d in Gambia's subsoil were not commercially
/ ...
A/AC. 35/SR. 212
(Mr. exploitable.
English Page 9 Williamson, United Kingdom)
It seemed, therefore, that for the time being Gambia would have to
continue to concentrate mainly on the cultivation of groundnuts. He recalled, in that connexion, the case of Mauritius, whose economy was also based in large part on a single product - sugar.
The conclusions of the
expert survey mission which was to undertake an inquiry into the Territory's economy would certainly be interesting.
The experts might conceivably consider
that, since diversification programmes would be expensive, the present situation, Which was relatively satisfactory owing to the fact that production was
t~
~.'ationally
the existence of guaranteed markets and organized, had definite advantages.
Furthermore, although it might be desirable in certain cases to diversify production for the salee of exports, there was another problem,that of malnutrition, Which must not be overlooked.
Whatever was done about export crops, it was
important that more and better food should also be produced for local consumption. Lastly, he drew attention to the encouraging example of Ghana, whose resources still depended to a large extent on cocoa exports. He
,~nt
on to make some cOlI!lIlents on the report on the balance of payments of'
Non-Self-Governing Territories with the respective metropolitan countries
(A/AC.35/L.317), which he considered excellent. One important general point emerged from the report:
the divergent patterns of trade betw'een the Territories
and the United Kingdom and the fact, indicated in paragraph 60 of the report, of the general decrease in the Territories' dependence on trade with the metropolitan country, showed that the United Kingdom Territories were perfectly tree to choos& their suppliers and their purchasers.
As table 3 of the report indicated, for
example, the share of the United Kingdom in Nigeria's exports had declined from
78.2 per cent in 1952 to 55.5 per cent in 1958J and the United Kingdom's share in that Territory's imports had fallen trom 52.2 per cent to 43.9 per cent over the same period. Similarly, table 5 indicated that the share of the United Kingdom in the exports of Kenya had been 31 per cent in 1949 and 29 per cent in 1958 and that during the sane period the United Kingdom's share in that Territory I s imports had fallen from
77 per cent to 36 per
~ent.
I ...
A/AC.35/SR.2l2 English Page 10 (Mr. Williamson, United Kin~dom) There were only two exceptions to the freedom of trade of the United Kingdom Territories.
The first, which was of no great importance, related to exports:
the United Kingdom Territories, like those of other western countries, restricted their exports of certain strategic commodities to certain countries.
The second
restriction concerned - or, more accurately, had concerned - imports.
After the
war the Territories
j
lil:e other countries in the s·cerling area, had applied to
imports discriminatury measures designed to protect the balance of payments of the sterling area as a progressively modified.
,~ole.
Those systems of control had, however, been
Thus, during the period under review, the Territories had
liberated over 90 per cent of their imports from CEEC countries, and after the Commor 3alth Trade and Economic Conferenl_c of 1958 they had allowed imports of most raw materials and machinery from countries in the dollar area. He might add that for so~e years now the Territories dependent on the United Kingdom had been able to purchase dollar goods whenever they were essential to their reqUirements and could not be obtained from other sources at competitive prices. r.S a result of the strengthening of the pound sterling the necessity for such disc...c 1.minatory measures as had remained had now disappeared, and in November 1959 the Governments of the Territories had been informed that the United Kingdjm Government no longer wished to justify any of its restrictions on balance of payrcents found and they were advised that they could, in particular, remove any discrimination which they still practised against the dollar area. Certain territorial Governments would no doubt wish to maintain quantitative restrictions on certain imports, principally for the protecti.on of local industries, but their decisions would hence_~rward be dictated by their om1 needs only. In that connexion he wished to stress that the grants and loans made by the United Kingdom Government under the Colonial Development and vielfare Acts were in no way tied to United Kingdom exports, whether of goods or serv_ces. In conclusion, he had ~w0 coservations to make on paragraphs 17 and 24 of the report.
In paragraph 17 he considered that the text would reflect the situation
more accurately if' the last sentence were amended to read: "It was of course the inflow of' capital that gave rise to the over-all deficit in their balance of payments on current account." Secondly, he thought that it would be preferable to use the word "changed l ! instead of "deteriorated" in the first sentence of paragraph 24. Nigeria had been spending some of' its sterling balances on development. That was partly what they were originally built up for.
/ •.•
A/Ac.35/sR.212 English Page 11 Mr. DADZIE (Ghana), replying to the representative of tl:e United Kingdom,
agreed that it was necessary to take account of local conditions. bis statement could be interpreted as
meaDi~g
the contrary.
Nothing in
With regard to
Gambia, he regretted the failure of the schemes to which the United Kingdom representative had referred.
It was possible, however, that more extensive
research C?ud bet·cer organized popularization services would have ensured the success of those schemes. ~employment
Improved organization would help to combat the
to which rural labour was subject.
As to the fact that Ghana had a prosperous eronomy based primarily on the cultivation oi' a single crop, that was not a convincing argument against the diversification of crops and (b)
producti~n.
TERMS OF TRADE (AI AC. 35/L. 314) r~ss Y~MAL (Iraq) drew attention to the important role played by external
trade in the economies of most of the Non-Self-Governing Territories, a very high percentt
c
c;f whose gross national products
export trade.
- 40 per cent in some cases - was
The economies of those Territories were based on
directed
tr)
tL~
the sale
0 ..
pr-lmary commodities, the world prices of which were subject to sharp
fluctuations
(:~t,ermined
by the volume oJ..' demand.
The Non-Self-Governing
Territories were powerless to control eicher the volume of that demand, which depended on the needs of the industrialized countries, or the volume of supply, since, with very few exceptions, the major sources of those commodities were not in the Non-Self -Governing Territories. Some Territories had taken steps to moderate the unfavourable effects of world price fluctuations - di versii'ication of crops, adaptation of production to lIlarket conditions - and the marketing beards had been useful to some extent. Nevertheless, ·'.:,he basic problem was still unsolved and the Ncn-Self-Governing Territories remained economically vulnerable. The Non-Self-Governing Territories were faced With another
problem~
in
order to carry out their development programmes they were obliged to import increasing quantities of machinery and capital goods, the prices of which had been r5.eillg steadily becd-use of inflationary pressures in the economically advanced countries.
That factor, in addition to the fluctuations of commoaity
I.··
A/AC.35/sR.212 English Page 12 (Miss Kamal z Iraq) prices in the world market, led to a chronic imbalance of trade and earnings. Thus in 1957 the East African Territories under United Kingdom administration had had a deficit of £22 million, while in 1958 French Equatorial Africa had had a deficit amounting to $46 million and French West Africa one of $70 million. Her delegation reserved the right to revert to the question in the course of the discussion. ~~. WILLIAMSON (United Kingdom) replying to the Iraqi representative,
pointed out that a trade balance deficit was not necessarily an unfavourable factor.
That was true in particular of the Territories which were in need of
capital development and investment from oversee,s p,ncl f:Jr '\,hich a balanced foreign trade v~uld ce a sympton of stagnation. Referring to paragraphs 39, 41 and 43 of the report (A/AC.35/L.314), he recalled that he had already dealt with the qu~stion of price s"l,abilization in some detail in his preliminary statement. He would~ however, point out that since the war the United Kingdom's commodity policy had been based on the principles set forth in chapter VI of the Havana Charter.
Inter-governmental
action might, of course, be needed in order to smooth away special difficulties peculiar to commodity production and trade, by preventing or moderating short-term fluctuations which served no useful economic purpose and by easing the transition to alternative production.
It was important in such cases that producers and
consumers should discuss together the steps to be taken and should participate on an equal footing in any inter-governmental commodity agreement which might be reached after a thorough study of the problem.
Those were the principles
followed by the United Kingdom, which would like to see an increase in multilateral trade and the solution of commodity problems by mutual consent in such a way as not to ignore long-term trends or aggravate a prevailing diseqUilibrium. In his delegation's view, the interests of the co~odity exporting Territories could best be served by maintaining economic activity at a high level and promoting its expansion both generally and in the importing industrialized countries.
The United Kingdom's policies had been designed to that end.
His
Government was well aware of the serious prcblems '\-,hich coul(, be caused by wide fluctuations in commoiity prices and was prepared to participate in any examination of such problems on a commodity by commodity basis.
In view of
the fact that the problems varied widely from one commodity to another, that was the only way of achieving worth-while results.
I ..·
A/AC.35/SR.212 English Page 13 (Mr. Williamson, United Kingdom) The United Kingdom participated in four of the five international commodity agreements now in torce, namely those on sugar, tin, wheat and olive oil. With regard to the coffee agreement it had made a unilateral declaration to the effect that, subject to the Agreement of the local Governments, its -best endeavours would be used to restrict exports of coffee from its East African territories during the current coffee year.
The Governments of Kenya, Tanganyika and Uganda had since
stated that they would agree to limit their exports of coffee during the period from 1 October 1959 to 30 Septenber 1960.
In addition, the United Kingdom and its
East African Territories were at present taking part in the work of the coffee study group and had been foremost in advocating that a study of the long-term position should be made.
The United Kingdom was also participating in the work of
the other commodity study groups, such as those on cotton, cocoa, rubber, rice, coconut and coconut products, lead and zinc, wool and grains.
Moreover, in
confor.mity with its desire for increased multilateral trade and in the interests of primary producing countries, the United Kingdom had participated in the establishment of committees, within the framework of GATT, Which were studying the problems of agricultural protectionism in the industrial countries and other impediments to the trade of under-developed countries. While its advice was at all "tiimes available to the Territories for which it was responsible, the United Kingdom left them entirely free to decide whether or not to participate in international commodity agreements.
All the sugar-exporting
and most of the sugar-importing Territuries were participating in the International Sugar Agreement. Most of the Territories were participating as importers in the International Wheat Agreement.
Nigeria was participating in the International Tin
Agreement as a producer, With separate representation.
With regard to the Olive
Oil Agreement, Cyprus was the only Territory 'W.lich might be much interested in participating, but in view of its forthcoming independence it seemed preferable to leave a decision on the sUbject to the Government of the new republic. He went on to question some of the statements made in paragraphs 41 and 42 of the report (A/AC.35/L.314).
Far from acting collectively to maintain the prices of
their exports at a high level, the industrial countries generally competed With each other on the market, to the advantage of the purchasers.
/
...
A/AC.35/SR.212
English Pa.ge 14
(Mr.
Williamson, United Kingdom) Paragraph 46 spoke correctly of the part played by the marketing boards in
stabilizing prices paid to producers.
He was not sure, however, that he could
agree with the conclusion dra'WIl in the second sentence of the paragraph.
The
sale of connnodities through central organizations might have had a by no means negligible influt::nce on the level of prices in the world markets. would like to hear the views of other delegations on that point. ~~e
meeting rose at 12.25 p.m.
His delegation
