Britain proposed a new plan for channelling the vast profits of oil producing countries into consumer countries hit with increased oil bills.
GV Sheraton Park Hotel
GV INT. Conference hall
SV Denis Healy
GV PAN National flags
SV William Simon
MR. HEALY: Mr. Chairman, the problem than which confronts us all, whether we are oil producers or consumers, is to find some means by which the oil consuming countries can continue to finance the purchase of the oil on which they depend to maintain production at tolerable levels. In other words, we must find some means by which the oil consuming countries can borrow the so-called petro-dollar surpluses of the oil producers in proportion to the deficits which they will incur if they maintain adequate oil imports.
Unfortunately, for reasons which we all understand, the petro-dollar surpluses of the oil producers, although they are likely to be held somewhere in the consuming countries, will be distributed in ways which bear no relation to the distribution of the oil deficits. The problem of recycling these petro-dollar surpluses so as to match the needs of the countries with oil deficits is therefore one of critical importance, not only for the oil consuming countries, but also for the oil producers.
MR. SIMON: I am confident we can also respond appropriately to the challenges of our day. But first we must identify the issues correctly. Let me declare myself now on three of these key issues. First I do not believe the world is in imminent danger of a drift into cumulative recession -- though we must be alert and ready to act quickly should the situation change unexpectedly. I do believe the world must concentrate its attention and its efforts on the devastating inflation that confronts us.
Second, I do not believe the international financial market is about to collapse. I do believe that situations can arise in which individual countries may face serious problems in borrowing to cover oil and other needs. For that reason we must all stand prepared to take cooperative action should the need arise.
Third, I firmly believe that undue restrictions on the production of raw materials and commodities in order to bring about temporary increases in their prices threaten the prosperity of all nations and call into question of our ability to maintain and strenghten an equitable and effective world trading order.
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This film includes segments of the speeches of both Mr. Healy and Mr. Simon. A transcript follows:
Script is copyright Reuters Limited. All rights reserved
Background: Britain proposed a new plan for channelling the vast profits of oil producing countries into consumer countries hit with increased oil bills.
The proposal was put to Tuesday's (1 October) session of the annual meeting of the International Monetary Fund by the British Chancellor of the Exchequer, Mr. Denis Healy.
The plan gained the immediate backing from European countries and guarded endorsement from the United States Treasury Secretary, Mr. William Simon.
Mr. Healy proposes that the IMF greatly expand its existing facility for borrowing from oil producing countries.
This has so far raised 3,500 million dollars, GBP 1,450 million) and Mr. Healy told reporters after his speech. that it was difficult to estimats a goal, but he would like to see the IMF raise about 30,000 million dollars (GBP 12,500 million) a year.
Mr. Simon said although the United States believed existing financial arrangements are standing up well to the strains of the present situation if the need arose for additional international lending, his country would support it.
SYNOPSIS: Washington's Sheraton Park Hotel, the scene of the International Monetary Fund's annual meeting. At Tuesday's session the British Chancellor of the Exchequer, Mr. Denis Healy, proposed a plan to redistribute the profits of higher priced oil.
The European countries endorsed the proposal to greatly extend the IMF's present oil-money facility. But the United States Treasury Secretary, William Simon, gave only his guarded approval