Chavan’s Comments

On IMF and World Bank

The following is the text of the speech by the Finance Minister, Shri Y. B. Chavan, at the Commonwealth Finance Ministers’ annual meeting at Nassau, Bahamas, delivered on September 23, 1971.

“ Mr. Chairman,

We are meeting this year at a time when the machinery for international economic co-operation that we have built up so patiently over the past 25 years or so is under considerable stress and strain. There is talk of revising the IMF charter and even of holding another Bretton Woods Conference. The third replenishment of IDA is heading for the same fate as the second one. The third UNCTAD Conference will take place soon without any tangible evidence that the objectives of the second UNCTAD have been achieved to any significant extent. In the field of trade, recent events have cast a shadow on the effectiveness of the GATT and on the prospects for the general scheme of preferences. Within our own family of the Commonwealth, the United Kingdom seems to be all but set for membership of the European Economic Community.

If ever there was any purpose in a meeting of the Commonwealth Finance Ministers, it is on this occasion when so many decisions in the international economic field are imminent. I would like, Mr. Chairman, therefore to devote my remarks even at this stage to some aspects of the machinery for international economic co-operation about which we, in India, and I am sure in most other developing countries, feel seriously concerned. I will add towards the end, a few remarks on the current economic situation in India. We have before us excellent reviews of the world economic situation as it affects the developed and the developing countries respectively, and I do not wish to comment on what is admirably stated in these papers. But there are overriding issues concerning the relationship between the two groups of countries which deserve to be noted at the outset.