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CONFIDENTIAL
28968
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'NORTH/SOUTH DIALOGUE MAKING IT WORK' WERE COMMISSIONED BY
HEADS OF GOVERNMENT IN 1981. THE THIRD, 'TOWARDS A NEW BRETTON WOODS', WAS COMMISSIONED BY THE 1982 COMMONWEALTH FINANCE MINISTERS MEETING. WE EXPECT DISCUSSION AT CHOGM TO FOCUS ON THE
NEW BRETTON WOODS REPORT.
(II) DESPITE ITS RADICAL-SOUNDING TITLE, A GOOD DEAL OF THE
DETAILED ANALYSIS IN THE COMMONWEALTH REPORT 'TOWARDS A NEW BRETTON WOODS' IS SENSIBLE, AND IS BASED UPON THE PRINCIPLE OF ADAPTING THE PRESENT INTERNATIONAL FINANCIAL INSTITUTIONS. THE
DESIRABILITY OF SUSTAINED NON-INFLATIONARY GROWTH, ENCOURAGING
DIRECT PRIVATE INVESTMENT, GIVING PRIORITY IN AID FLOWS TO THE POOREST, ENHANCED COORDINATION OF MACRO-ECONOMIC POLICIES AND
RESISTANCE TO PROTECTIONISM ARE ALL IDEAS WHICH WE CAN SUPPORT.
WE SHALL WANT TO DRAW ATTENTION TO THESE POSITIVE ASPECTS.
(III) AT THE SAME TIME WE HAVE STRONG RESERVATIONS ON
PRACTICAL GROUNDS ABOUT THE USEFULNESS OF AN INTERNATIONAL
MONETARY CONFERENCE, WHICH IS THE CENTRAL ELEMENT IN THE BRETTON
WOODS REPORT. SUCH A CONFERENCE COULD UNDERMINE CONFIDENCE IN
THE PRESENT INSTITUTIONS. IN OUR VIEW THE MOST EFFECTIVE WAY OF
COPING WITH THE PRESENT STRAINS ON THE INTERNATIONAL FINANCIAL
SYSTEM IS TO CONTINUE TO SUPPORT EXISTING FINANCIAL INSTITUTIONS
BY GIVING THEM ADEQUATE RESOURCES, AND ENCOURAGING THEM TO ADAPT
THEIR PROCEDURES IN THE LIGHT OF CHANGING CIRCUMSTANCES, RATHER
THAN TRYING TO SET UP NEW BODIES. WE SHOULD CONTINUE WITH THE
PRESENT COMBINATION OF ACTION BY THE GOVERNMENTS OF
INDUSTRIALISED COUNTRIES, PRIVATE BANKS AND INTERNATIONAL
FINANCIAL INSTITUTIONS TO PROVIDE SUPPORT TO DEVELOPING
COUNTRIES, AND OF ACTION BY THE GOVERNMENTS OF DEVELOPING
COUNTRIES IN ADOPTING THE NECESSARY ADJUSTMENT MEASURES. IT WAS
AGREED AT WILLIAMSBURG THAT MINISTERS OF FINANCE, IN CONSULTATION
WITH THE MANAGING DIRECTOR OF THE IMF, WOULD DEFINE THE
CONDITIONS FOR IMPROVING THE INTERNATIONAL MONETARY SYSTEM AND
CONSIDER THE PART WHICH MIGHT, IN DUE COURSE, BE PLAYED IN THIS
PROCESS BY A HIGH LEVEL INTERNATIONAL MONETARY CONFERENCE. WE
STAND FIRMLY BY THE WILLIAMSBURG FORMULA, AND WE COULD NOT (NOT)
ACCEPT ANY REFERENCE IN THE COMMUNIQUE WHICH APPEARED TO PREJUDGE
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CONFIDENTIAL