PRESS OFFICE TRANSCRIPT 12 JUNE 1979
INTERVIEW WITH MR. ASOU, YOMIURI SHIMBUN
( JAPANESE CORRESPONDENT)
Mr. Asou
It is only 16 days to the opening of the Tokyo Summit on the
28th of June. This Summit occurring as it does in the midst
of continual oil price increases by the oil producing countries
will have energy problems as its main topic the the extent that
it is being called the energy summit. When you consider the
vast energy situation Australia's every move seems to have a
great capacity to affect the international ( inaudible) the
economic order. Since it is one of the world's largest
producers of uranium, iron ore, coal and so on. It also seems to
have the capacity to give a lead to world energy policies. So,
at first I would like to ask two points: what direction do you
think a country participating in the Tokyo Summit should take
in relation to the energy problems and what do you expect it to
achieve? Prime Minister
I don't think energy is it is certainly not the only vitally
important question at the Tokyo Summit. It is important.
The problem of inflation I think is now more important than it has
been for many many years. I will speak about energy first and
then if I may come to the question of inflation. Australia is
an energy producer, energy exporter. We are short of oil as you
know and we need what we have for our own resources but for coal,
uranium, natural gas, we are exporters and we believe we have an
obligation and a responsibility to do what we can -to provide
energy in an energy-short world. This is one of the important
reasons why we are determined to mine and export more uranium and
to open new mines because we know that nations such as Japan
and many others are now becoming increasingly dependent on nuclear
fuel for peaceful purposes. I think we can set a lead. We can
set a lead in terms of safe trading in uranium to reinforce the
non-proliferation regime. Our safeguards policy is certainly a
strict one, as it ought to be. Australia has recently become a
member-of the Inter * national Energy Agency and certain countries
the members of that Agency have made rules which is designed
to reduce the consumption of oil and oil-based fuels. I don't
think all countries are pursuing those agreements with the vigour
that they should. And we certainly all need very vigorous programs
of conservation and of diversification into other forms of
energy. I suspect that this might be more urgent than many
governments have led -their peoples to believe. The United States
is one of the world's largest, most populous and as the world's
wealthiest country is a vast consumer of energy. In a sense
energy doesn't belong to any one country, it is a resource available
to the world and if one country is pursuing more than its
reasonable share of that finite world resource then it is using
at too great a rate a resource which many countries will need.
So, programs of conservation, programs of diversification, are
vastly important for all of us. Now, Australia has moved a long
way with our world parity pricing policy for oil, promotion of
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Prime Minister ( continued)
natural gas. I think we have a good way further to go and
I have commissioned a report for the Government the Minister
for National Development on various matters that might be put
to the Government and the Government will be able to make
decisions about them in relation to conservation, in relation to
diversification. I think these are vastly important issues.
I hope the world's energy shortage won't be allowed to hide from
those leaders of the great and powerful countries that attend
the Tokyo Summit forces which I think are even more important and
even more dangerous than the potential energy shortage: and that is
continuing inflation. Because. North America and Europe were
making some progress against inflation and now for a variety of
reasons inflation is gathering pace again. There are some reasons
that we can understand: oil and meat prices have given a boost
to inflation in Australia and a number of other countries. We
have already responded to that with our own mini-budget. Unpopular
as it was, but it was necessary and responsible to maintain our
anti-inflationary policies. and the thrust of them. I fervently
believe that unless the great and the powerful industrial countries
are going to give a more fervent and more vigorous lead against
inflation then we are going to be in for a long and prolonged decade
of difficulties.
Since 1973-4 world trade has grown at only 4 percent a year. In
the twenty years before that it grew at 8 percent a year. That
4 percent has occurred during a period of high inflation when
growth is low, unemployment is high, and activity, investment
development was minimal. It is going to stay like that and
unemployment is going to stay high unless the major industrial
countries really have the political determination and courage
to overcome inflation.
What the great and powerful do, does a great deal to determine
what happens around the world, but in many cases Australia is a
fortunate country-because we have political and economic stability.
We have a lower rate of inflation than North America and much
of Europe. Japan is still doing better, but we are hopeful we
can start to match to Japan in these particular matters. Therefore,
our industry should be becoming more competitive than those and
we will get a larger share of this market and a better share of
export markets.
We are also fortunate because of great minerals and resources in
the country. Because of political and economic stability we will
attract great investment from overseas even if the general growth
in these industries is relatively low. I think we will get more
investment or some that would otherwise have gone to other
great continents. Because of that, I think that in Australia there
willbe more activity and a greater buoyancy and if there are
difficulties around the world I think we have a capacity to work
our own through with less damage than would occur in many countries.
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Prime Minister ( continued)
Now that's concerning to Australia, but it's not much consolation
for those many countries and those tens of thousands indeed
many millions of people in the advanced industrialised countries
who will be out of work because inflation is too high.. Every
Summit Conference has spoken about inflation and it is going to
be much harder after this conference because when communiques
are issued, but not enough happens as a result of those
communiques being issued, it makes it much harder to maintain
the vitality and vigour of the conference providing a hope and
an understanding in many countries Australia and many many
others that the economies of the very large countries are going
to be managed in such a way that we will get onto a more secure
path. You say these things once, twice, thrice, and it is harder
each time to have a community that is going to be believed.
The Tokyo Conference therefore, is of great importance because
in relation to the energy problems which are certainly great but
in relation to the problems of inflation, which I think are more
substantial and more far-reaching, to be believed what's said will
have to be followed by government action which can be seen to
get on top of inflation.
Question ( Inaudible),. Australia has succeeded in keeping the price
increases very low, less than 5%-10%.
Prime Minister
Not low enough, but lower than them.
Question But among the countries participating in the Tokyo Summit, there
are countries with economies that are going to the wall, that
are experiencing price increases, rates, of nearly 20 percent.
So what should these countries do to restrain inflation?
Prime Minister
I don't know that any of the countries involved have inflation
rates as high as-that, but a number have inflation rates 10 percent
and over and rising*. There is no easy way of restraining inflation.
Most importantly, I think it means that Government expenditures have
got to be restrained. We have to destroy the very false and
shallow philosophy that governments can provide all things that's
asked" of them. What governments spend they have to take from
people. What governments spend needs -to-be limited, needs to
be responsible. In many cases expenditure had gone too high, as
it certainly had in Australia in earlier times. In addition to
that, of course, monetary policies need to be sensible managed
so that the money supply growth is not too great. There are
many aspects in controlling inflation wages policy and many
other things. But government expenditures, the growth of the money
supply, are two very important elements. If I had to say what is
the one most important thing I would say government expenditure. ./ 4
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Question Back to the other problem two relative questions. Judging
by the crude oil price increases since just in the beginning
of this year alone, dialogue between oil producing countries
and consuming countries does not seem to be going very well.
What should be done to improve understanding between the two
sides? Prime Minister
Are you talking about oil, or all commodities?
Question Yes especially with oil.
Prime Minister-
I think one of the problems here of course comes because of
a shortfall as a result of disturbances in Iran. I agree with
you, it is a difficult situation and I believe that the consuming
countries need to pursue their dialogue with the oil producing and
exporting countries to the maximum possible extent because they
do have a capacity to contribute to world economic stability or
then lead to instability by the policies they follow. Quite plainly,
in the medium-term to longer-term, it is very much in the
interests of the oil producing and exporting countries also to
have a stable and healthy world economy. If that could be better
understood I think the dialogue between the two would be more
beneficial. Question We hear that at the previous four summits the ( inaudible) programs,
and particularly the Western countries' strategy against USSR
were discussed secretly.
The Western countries' strategy against the Soviet ( inaudible)
were discussed secretly. In development in world politics, I
think the Bonn Summit, the Government of the Shah of Iran was
supported by the United States has been overthrown. Vietnam has
invaded Kampuchea and interwined with this a conflict has arisen
between Vietnam and China and Asia continues to experience political
disturbance. Political stability in Asia is important to
Australia and Japan. How do you view the outlook for international
politics and particularly ASEAN politics?
Prime M-1inister
I welcome the normali sation of relations between China and the
United States and the treaty between Japan and China. These are
both positive moves which hold out possibilities for a more secure
future. I think it is particularly important that the United
States developed fully the possibilities that flow from normalisation
of relations with China. and'-therefore flesh out their policies
in the Western Pacific and in the Asian theatre the development
of which were held up when there was not full exchange of
relationships between Peking and Washington.
Prime Minister ( continued)
So there are positive signs there and real possibilities
that will work to our advantage.
The circumstances in the Middle East, in Iran, in Vietnam and
Kampuchea, the conflict between Vietnam and China are all
disturbing and they have re-awakened some fears I believe in
Asia and Southeast Asia that military ventures the pursuit of
national ends by military means is not a thing of the past
as we had hoped after the Vietnam War. In these circumstances
I think it is all the more important for countries such as Japan
and Australia to work at their own relationships and develop
those even further. It is a very good relationship and
developing greatly. It is also important for Australia and other
countries of Asia Southeast Asia and ASEAN to work very
closely together.
I recently was in Manila and Indonesia and I believe that
Australia's wish to have ever closer relationships with such
countries as reciprocated by President Marcos and President Soeharto.
Certainly countries that want peace, stability, security, so
they can build up the standards of their own
( TAPE TURNED OVER)
Que-stion
the interests of Australia in the Tokyo Summit. Do you have
any particular hopes for this Summit in Asia and do you have
doubt about a Summit in which only such a limited number of the
advanced countries are participating. ( Inaudible) character
of the Summit has altered because of changes in the international
political and economic situation can you give me your opinion
on how the Summit should go from now on?
Prime Minister
I spoke to Prime Minister Ohira when I was in Manila and indicated
what Australia thought the most important things to he discussed
at the Summit and energy, as you opened by asking me about,
was certainly on the list. But inflation and protectionism
was high on my list. I think Australia's views and the views
of the Prime Minister of Japan are very close in relation to
these matters and that is encouraging. I can understand the
seven Summit countries wanting to keep that group to itself.
If they extended to countries such as Australia there would be
many other countries in Europe with economies as large as ours
tha would also claim to have a right to be involved. So I
understand that fully'. But I appreciate the moves that Japan
had made on Japan's initiative earlier, to seek to have Australia
included. We were flattered by that but certainly didn't want
it taken so far that it would be an embarrasment to Japan with
the other Summit countries. I think that we need to understand,
and the Summit members need to understand, that by their meeting
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Prime Minister ( continued)
together, as they do, they are giving notice of and accepting
responsibility of the fact that what they do inflie management
of their affairs affects not only themselves but the whole
Western system of trade and payments. If they manage their
economies well, the world will march forward well and the
growth in world trade will be great, maybe double what it is now.
If they manage their economies badly, then the Western system
of trade and payments will muddle along as it has during the
last several years of high inflation, low growth in trade and
high unemployment. Therefore, by meeting together, they are
giving recognition of an enormous responsibility not only for
their own people but to really the whole Western world and
North/ South relationships and the way in which that can develop.
I only hope for their sake, and for ours, that they will respond
to it fully. I think on this occasion it is not just a question
of leaders meeting and making a statement. The world will want
to see action following from that meeting, of a forthright and
vigorous kind that will cure some of the world's grave and
serious economic problems.
Question relative to the ( inaudible) programs. What should be done
by the Tokyo Summit so that the North/ South problem can be
resolved and stable political and economic structures can be
built-between the
Prime Minister-
The best thing that could be done in relation to North/ South issues
to make a Common Fund a reality now all accepted the Common Fund
but let Europe, the United States, join the International Sugar
Agreement let's get on and negotiate other commodity arrangements
that are important to developing countries, so make~ the integrated
program for commodities a very real reality. I-have no doubt
that Japan's view and Australia's views are very similar in that
regard. I hope that the Summit Conference will give significant
attention to these particular issues.
Question Japan, like Australia, is a strong supporter of the Common Fund
and what role should Japan play in the Common Fund at the Tokyo
Summit? Prime Minister-
At the Tokyo Summit I ' hope that Japan would persuade nations
there to participate in the particular commodity programs as
I mentioned the Sugar Agreement which America and Europe have
not yet joined and also to participate in other commodity
arrangements where they have an interest in the trade, either as
producers or more principally, as consumers. That will help to
bring the Common Fund to a reality. If the members of the Tokyo
Summit can set an example in that regard well then it will be
a very useful step forward. 000---