PRIME MINISTER'...
FOR MEDIA 17 SEPTEMBER 1979
ADDRESS TO PACIFIC-ASIAN CONGRESS OF MUNICIPALITIES
This is the Sixth Pacific-Asian Congress of Municipalities
and Australia is honoured, Adelaide is honoured, that it is
being held in this city. I am delighted to be here with you.
The region from which you all come is, of course, a vastly
important region for Australia, as it is to you. It is the
region in which we live. It is the region in which we all
need to work out our own futures, working as far as possible
in harmony with policies that can advance our common cause to
the greatest extent.
I believe this meeting does affect the sense of interdependence
between cities, between nations, between people. The Asia-Pacific
economy is comparable in many areas with the Atlantic community
and the Atlantic economy comparable in population, comparable
in resources and Gross National Product, and comparable in
trade and industry.
In some respects, it is one of the fastest growing areas in
the world. Within the region of course there is some honest
diversity participants of this conference come from countries
that are very far from Australia, others that are just next door.
They come from two hemispheres; from large and from small
countries, and from countries in all stages of development.
But within that diversity I believe we should seek the goals
of moderation, and of tolerance and understanding, especially
where there are differences. Diversity is one of the significant
characteristics of the Commonwealth Heads of Government Meeting
when about 40 Heads of government meet every second year.
At the last Heads of Government Meeting, at Lusaka, for example
they worked together to help solve intractable problems and
difficulties. They were able to do that only because people
were able to be moderate passionate in support of moderation
if you like with a spirit of compromise and with a spirit
of good sense and well-being. Very much the same values are
needed in our own region, where there are also problems. There
are problems in Indochina, problems with refugees, and the
challenges of inadequate standards of living in a number of
countries.
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A number of newly industrialising countries Singapore,
Hong Kong, the Republic of Korea and Taiwan have shown
remarkable progress over recent years, and in some ways, have
led the way in the newly industrialising process. These four
countries produce almost half the exports of industrial goods
among the world's developing countries. That indicates on the
one hand, the progress that these four nations have made, but
it also emphasises the fact that greater progress is needed
in a number of other countries.
That is not always the fault of the countries concerned.
Unequal trading opportunities sometimes hold back development
which could otherwise occur. There are many countries where
prospects are more limited than for these four, unless there
are adequate aid programmes and adequate trading arrangements
made in the wider world community.
There is also a difference within the region in the extent
to which countries have an acceptance of global economic
interdependence. There are a number of countries that are
very open in their trading practices: Singapore and Hong Kong
S are two which depend almost totally on trade and on open
markets for world goods. There are many others, in Indo-China,
for example, where there is little interaction with neighbours
and with economies that are nowhere near so open.
There is this great diversity, not only in politics and approach,
but also in need, between the countries of the region. There is
however, a growing interdependence and a growing understanding
of the need of the importance of interdependence between peoples
and countries Despite a great diversity of cultures, and
in economies, that interdependence is becoming more and more
evident. There is now a network of economic relationships: 40% of
the United States' exports, for example, go to countries of
the Asia Pacific region while 47% of the United States' imports
come from the western Pacific or from Canada. For Japan,
of their exports go to the Asian Pacific region and 43%
of their imports come from the region. 60% of the total trade
in most western Pacific countries Jiie~ s ' within the region itself . None
of this would be possible if there were not a close and-a
growing network of economic and commerical relationships
between the countries and cities of the region.
Over recent times there has been significant change in
the direction of trade, in many cases, and a significant
transfer of technology. All of these again point to a
growing interdependence between nations.
Sometimes that interdependence can carry some dangers with it.
We need to understand the possible dangers-and to do what we
can to avoid them. The development of ASEAN for example has
been quite remarkable. It is now a cohesive and strong group
of nations advancing its own region and making a greater
contribution therefore to the general stability of South East Asia
and the western Pacific. But a number of the industrieswhich
have emerged in ASEAN countries are competing with the
same goods and the same commodities for the same markets, and
therefore a competitive environment grows within the region.
That's not just competition between industries in the region / 13
and other outside. The competitive situation also arises
within the region. It is important to do what we can to
see that that does not lead to tensions within the region,
as economic rivalry has sometimes in the past led to tension
between other nations. Certainly we need to avoid in the
Asia Pacific area any signs of the sort of economic nationalism
that did so much damage in Europe and North America in the
1930s. I don't believe there are signs of that kind of
economic nationalism in our theatre. Nevertheless, it is
very important indeed to be aware of the dangers that can
come in inflationary circumstances, where the growth of trade
is perhaps not as great as we would like to see, and the pressure
for greater protectionism can therefore also be greater than
we would like to see. It is to the credit of the region
the Asian Pacific theatre that these dangers have largely
been averted up to the present time.
A short while ago, William Miller, Secretary to the'-United States
Treasury said: " Inflation is a clear and present danger. It has
struck at our nation's vitality. If it is not checked, then
it will threaten our democratic system itself... We must
attack the root causes and totally eradicate the basic sources
of the malady... What is needed is a comprehensive sustained
and total war against inflation". I found that view to
be accepted, not only amongst the industrialised countries,
but in most international forums at a meeting called by
Jamaica at the turn of the New Year, developed and developing
countries alike at UNCTAD 5 in Manila, and als-o at the Commonwealth
Heads of Government Meeting at Lusaka. Because with rising inflation
confidence is reduced, profitability is reduced, uncertainty amongst
businesses and peoples is increased and then market growth is slow,
leading to unemployment and then to more unemployment. In these
circumstances, there can be great pressures for government
intervention, and sometimes pressures for intervention at the time
won't help cure the ills. It might sometimes make the ills more
serious and more difficult ultimately to eradicate.
One of the consequences of inflation is that it offers a threat
to developing countries and newly independent States. That can
come because inflation can lead to protection in advanced countries
and therefore to the denial of markets to newly devel-oping countries,
and to the industrialising countries.
Governments of the region need as much as we possibly can to
co-operate and to avoid the friction which can come from pressures
for a very rapid change. I believe we can assist each other, and
to some extent we can adopt common strategies to combat inflation,
to minimise the evils of undue protectionism. We can do more
actively to press major industrialised nations outside the region
to adopt like policies to combat inflation and to reduce
protection. This was a very strong thread at UNCTAD 5 in Manila
in a most magnificent conference center, in a city which housed
some 5,000 delegates in a most hospitable and friendly manner.
The evil of inflation and of increased protectionism is one which all
countries expressed great concern about at that conference, only
a few months ago. / 4
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Why is it so important to be concerned about these things?
To-understand it we need to look at the historical background.
Let me explain, against that background what I have in mind.
In the late 1940' s to about 1970 there was unprecedented growth
in world capital in the economies of developed and developing
countries alike.
There are particular reasons for that. Before the World War
there had been a depression, after the War there was pent-up
consumer demand which provided markets for the products of
factories of Europe and North America. There was the imaginative
Marshall Plan which assisted greatly in the rebuilding of wardamaged
Europe. There was the introduction of new technology
which produced new goods which in the industrialised countries
were going to become commonplace in nearly every household.
As a result of that, there was a sustained up-surge in growth
of trade and of income in many countries. Many developing
countries also experienced lack of growth during the same
period. But by the 1970s, that consumer boom was running down.
At the same time, there were increased impediments to enterprise,
to investment and to development. There were increased impediments
to jobs and to the creation of enterprises that would provide
more work for more people.
There were a number of reasons for this. The view had come about,
as a result of a certai-1 view cf economics, that government's
could provide all things. If they did rnot have'enough funds they coulc
just print more. Inflation became entrenched in the 1970s in'
many, many countries around the world in North America and in
Europe. As a result of that, world trade has grown at only half
the rate of the previous 20 years, as one of the direct causes
of high world unemployment. There was an expectation that
governments could provide all the things that their people
expected, hoped for and wanted. Maybe aspirations were too high,
but as the result of these pressures, inflation has become
entrenched as a grave and serious evil in many countries in
North America and Europe and in a number of others. But then
again, because in many of the years since the War growth has
been so great that people forgot the circumstances that might
have occurred before the Second World War. They took-growth
for granted. They thought this was the natural state of what
would occur in the modern economies of developed or developing
countries. Governments again led people to place unrealistic
demands upon governments and upon their own economies. Growth can
not be taken for granted. ' If you really want growth you have
to have policies that promote it.
The conditions which generated the great international growth
from about 1949 to 1970 have largely disappeared. I am concerned
that reducing inflation alone, and reducing protection alone,
may not in themselves achieve the resurgence in growth that
is needed if the problems of the world and world poverty are
to be overcome. Do we needstatutory road blocks for development, and
do we need statutory road blocks for investment? Many
investments that would have been possible 30 years ago,
years ago, maybe even 15, today would not be. There are all the
environmental requirements that new laws now place upon enterprise.
There are foreign investment provisions which oil companies
have; there are national investment policies; there are
restrictive trade practices legislation. Corporations and
enterprises have to find their way through all these things.
I am advised that in CaliforniaP for example, it could take
two to three years to get through the environmental restrictions
just to place some L. P. G. gas tanks on the Californian coast.
That is just one example of the difficulties that occur and
the various developments that were not in existence 20 years. ago.
Against that background, these concerns were mentioned at UNCTAD
in Manila. They were mentioned again at the Commonwealth Heads
of Government Meeting in Lusaka. As a result of the general
concern that getting inflation down alone might not be enough
to establish a resurgence of the world growth and of world
trade. The Commonwealth Heads of Government Meeting adopted an
Australian proposal for a study on the constraints to growth.
What are the constraints to growth within an economy and between
nations? Can a study by the Commonwealth throw some greater
light upon that and point the way to national or international
policies and might enable us to look forward to a more prosperous
world economic future than might otherwise be the case.
Australia will be providing a representative for the study
group and it will be reporting in time to assist governments
in their preparation for a special session of the United Nations
General Assembly in 1980. So that is not all that far off. It
has been'emphasised at UNCTAD and at other forums that the system
does not always work as well as we would like or work as fairly
as we would like. The Common Fund is designed to make sure that
developing countries in particular are given a better opportunity
to market their commodities in the markets of the world within
a proper framework and in a way which does not grow too serious
to upset our own development or plans. The need for the Common
Fund has been accepted both by the advanced, developed countries
and by the developing countries, although much work needs to be
done on its implementation.
I hope very much that work flowing out of UNCTAD 5 and out of
the study group which I have spoken about concerning the
Commonwealth Heads of Government Meeting will enable us to take
the debate further. I hope that it will point to-pol-cies which
governments can actively and sensibly pursue.
There is a great deal of co-operation within this region which
you are representing here ASEAN is a tremendous example of
mutual support and co-operation amongst five significant
countries. There is the Pacific Forum. There are
the countries of the Pacific dealing with New Zealand and
Australia which discuss many matters of mutual co-operation in
the Pacific and the-South Pacific in particular, matters such
as fisheries, transport and trade relatf. ons and a forum which
brings together the Pacific nations enables them to pool their
ideas, their hopes and their resources. There is the South
Pacific BureaUL for Economic co-operation which links Australia 6
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and New Zealand with small independent State of the South
Pacific and of Papua-New Guinda.
Australia has participated in regional meetings, for example
the 1978 Commonwealth Heads of Government Regional Meeting
which involved a smaller number of. States in the Pacific
together with India as the largest member of the Commonwealth.
That group identified fields of co-operation which can be
actively pursued amongst the member States.
As a result of that regional meeting, working groups have
been established on trade,-energy, terrorism and illicit
drugs and trading in drugs. A further meeting of that
regional group will be held and hosted in India in 1980.
The Commonwealth Heads of Government Meeting the full meetingheld
every two years with about 40 States present, quite clearly
and obviously at most times is going to be related to the highly
difficult and sensitive major national and international issues,
such as the last conference, Southern African issues, the
problems of Zimbabwe-Rhodesia and also the major problems of
economic relationships and the North South economic relationship.
At that major meeting, some of the smaller States felt that their
particular needs and concerns we're not always met. There is not
always an' adequate response. There is not always adequate time
to enable their problems to be discussed and understood. The
regional meeting provides a greater opportunity for that and
for that reason alone, is something of particular merit.
Interdependence amongst States is obviously promoted by a number
of the important institutions that are present in the area.-
the United Nations Economic and Social Commission for Asia in
the Pacific, the Asian Development Bank. There have been other
suggestions which help co-operation within the Pacific community.
There have been proposals fo~ r greater co-operation in relation
to Pacific trade, aid and development. The Prime Minister of
Japan has broadly suggested that a Pacific Basin community
should be established. There is much merit in these ideas, but
they need, a great deal of work, a great deal of examination.
People have an idea that the Pacific countries should be co-operating
more closely but they do not at the moment know in what form or
in what way; how it can be consumated. Therefore there needs to
be substance given to the idea, so that the countries of the
Pacific can pursue common objectives more vigorously.
I believe that this conference itself is a very good example in.
the way which communities can come together to discuss their
common hopes, their common concerns.
Very brie fly, could I say something about Australia in the region.
I pointed to the changing directions of trade a few moments ago.
Nowhere is that more evident than in the changed directions of
Australia's trade. In 1960, 33% of our trade was with Asia and
Asean 28% was with the United Kingdom. Now, over 50% of our
trade is with Asian and Pacific countries and only 7% with the
United Kingdom. Over the period from 1960 to the present trade
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has grown at an annual average rate in the Pacific Asian
area of about 14%. With the United Kingdom it has grown
by only 3% which means there has been a very real reduction
in real terms of trade with the United Kingdom. Then again,
if we look at ASEAN exports to Australia, to take an example,
they have grown from about $ 107 million worth in 1972 to
nearly $ 650 million worth in this last year.
Developing countries exports to Australia has grown from $ 600
million to nearly $ 3,000 million over the same period. Their
share of Australia's imports has very nearly doubled. It is
worth noting, that over recent years Australia's average
annual rate of growth and import from ASEAN countries to take
a group of developing countries has been more than 30%, where
total imports have grown at a very much lesser rate than that.
Developing countries share of Australia's total imports has
also grown very significantly over the period. In other words,
there has been a major reoitientation of Australia's trade and
trading direction. We still have important trade with Europe,
with the United Kingdom. But now the Pacific Asian theatre
is becoming increasingly important to us.
That I think is taking Australia's example to emphasise the
countries of the Pacific Asian theatre are much more dependent
upon each other than they once were, and I believe that that
trend will cerc'ainly continue for all of us in the years ahead.
In development assistance, we have special responsibilities
for obvious an d historical reasons with Papua-New Guinea,
and a large part of our development assistance goes to Papua-
New Guinea. But, beyond that, the bulk of our bilateral aid
goes to ASEAN and South Pacific countries where projects
varying from $ 1 to $ 50 million are being supported by Australia
and significant programmes also in the South Pacific. The
aid programmes themselves establish valuable contact on
national, provincial and local government levels and also
enlarge the reality of understanding between people. One of
the programmes of particular value is the student programme
where overseas students come to study in our universities and
colleges and schools. Since the Second World War, more than
26,000 students from nearly 90 developing countrie-s, lhve had
training in Australia under some form of official sponsorship
from our government or from another government. 12,000 of
these have come from ASEAN countries, and then on top, there
have been 16,000 private overseas students over the last 9 or
years from about 90 countries and about 9,000 of those have
come from ASEAN countries.
This was one of the best kinds of contact and communcation,
because it means that young men and women in our institutions
come to learn and make friends with students from overseas. In
that environment, they are gaining greater knowledge and
understanding of other countries and of other peoples. It is
certainly our belief and our hope that students who study here
and who return to their homeland carry a feeling of affection
for Australia. These bonds between people may well ultimately
be the strongest bonds between nations. We have recently adopted
policies which I hope will enable us to expand the number of
cases in our education institutions for students from other
countries. ./ 8
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The contacts between Australians and the people of the countries of
Asia, the Pacific, on a business, personal ahd commercial
level, are quite important to the relationship as an addition
to the relationship between governments. That is particularly
so when the historic and cultural backgrounds are so different.
We have quite actively sought to promote that kind of cultural
exchange between people, between Australia and a very wide
range of countries. That is another reason why there is so
much worth in this conference being held here in Adelaide.
Local government interdependence is also very important. That
we* have got this conference being held here is a recognition
that local government is very important to good government.
In many senses it is the level of government that is closest
to the aspirations and hopes of people, I am quite sure that
the participants in this conference will welcome the opportunity
to exchange ideas and acknowledge the way in which your plans
are undertaken, the advancement of your own cities and of your
own peoples. It will be important for Australian members of this
conference to understand how mayors and municipal leaders from
cities overseas translate their hopes into actions that will
advance the-importance of their own people. I am sure there
is much to learn in this particular direction.
The conference must surely lead us to have an enlarged
appreciation of other communities, of their needs, and enlarged
appreciation of how we can identify problems and resolve
difficulties. Nations are no longer self contained. They
can no longer in a selfish way pursue their own future without
some care, without some concern for their actions in other
nations, in other places. The economic, social and political
progress which we are all part of depends upon an ability to
enlarge contacts between people and between nations.
Therefore there is a benefit with the wider opportunities
thus created. Now, these objectives at this conference will
make an important contribution. I hope you will go back to
your own communities with an appreciation of what we are trying
to do-in Australia, and hope you will leave behind you a much
better understanding amongst a large number of Australians of
what you are doing to advance the cause of your cities and of
your own people.
If the conference achieves nothing more than that, it will
have advanced the cause of relationships between a very large
number of countries, between a large number of cities and.
peoples.